IMF: Venezuela’s inflation could top 1 million percent by end of 2018

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One million Venezuelan bolivar is today worth just over $8.

 

Inflation in Venezuela could top 1 million percent by the end of this year, according to the International Monetary Fund (IMF).

Shortages in food, water, medicine and electricity, as well as high crime, plague millions of Venezuelans, said Alejandro Werner, head of the IMF’s Western Hemisphere department.

“The collapse in economic activity, hyperinflation, and increasing deterioration … will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post.

If the prediction holds, Venezuela’s economy will have contracted by 50 percent over the last five years, Werner said, adding that it would be among the world’s deepest economic falls in six decades, comparable to Germany’s after World War I and Zimbabwe’s at the beginning of the last decade.

The IMF estimates Venezuela’s economy could contract 18 percent this year, up from the 15 percent drop it predicted in April. This will be the third consecutive year of double-digit decline, the IMF said.

“We expect the government to continue to run wide fiscal deficits financed entirely by an expansion in base money, which will continue to fuel an acceleration of inflation as money demand continues to collapse,” Werner said.

Full article: IMF: Venezuela’s inflation could top 1 million percent by end of 2018 (World Tribune)

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