When the International Monetary Fund predicted earlier this year that hyperinflation in Venezuela could top 13,000 per cent, it seemed as if the South American country’s economic outlook could not get any worse.
It just did.
With the situation in the country deteriorating faster than expected, the IMF has unveiled a new and far more severe prognosis, saying that Venezuela’s hyperinflation is poised to shoot for the stars by year’s end, reaching an annualised rate of 1 million per cent.
This is taking the former Green Party policy of quantitative easing to new levels of success! Everyone in Venezuela is now a millionaire!
Venezuela’s inflation is soaring as the economy has been broken by extreme corruption, failed socialist policies and a collapsing oil industry where a lack of spare parts and expertise has seen output fall to levels not seen since the 1950s.
The word “failed” is unnecessary. There’s never been a country where they have worked long-term.
The country may be running out of options, however. The inflation rate is so bad that Venezuelans are abandoning their nation in droves. An estimated 2 million will exit this year, bringing to 3.8 million the total who have left since 2016.
Migration and socialism often go together.
A week ago, dishwasher soap cost 3,800,000 bolivares; today, it’s 4,900,000. A kilogram of chicken cost 3,300,000 last week; today it’s, 4,200,000.
The chicken seems better value.
Yaimy Flores, a 30-year-old Caracas housewife whose husband, a janitor, earns the minimum wage of 5,196,000 bolivares a month
The highest minimum wage in the world!
For a country that was once South America’s richest per capita, “it means a brutal cycle of impoverishment,” said Asdrúbal Oliveros, director of Ecoanalitica. “For a majority of Venezuelans that depend on their jobs and don’t have dollar savings or receive help from their family members abroad, an inflation like this one, that reaches more than 1 million, condemns them to poverty in a drastic way.”
What makes Venezuela so interesting is it was a relatively wealthy country. Most socialist countries start off poor and remain poor. Venezuela is a stunning example of how you can go from the richest country in a continent to the poorest – all due to government policy.
They have the largest oil reserves in the world. They should be a first world country, but instead the Government’s socialist policies have plunged the population into poverty and starvation.