Venezuela’s inflation rate has broken a record with prices going up by more than 40,000 percent, according to experts. The 40,000 percent inflation rate is over the last year and experts think things will continue to get worse.
The numbers come from Steve Hanke, an economy professor at John Hopkins University. The professor told Business Insider that annual inflation in Venezuela has gone up by as much as 41,838 percent.
The recent inflation data has mostly come from the National Assembly, which is controlled by the opposition. Venezuela’s Central Bank has not released any data in years. The government blames most of the country’s problems on the opposition and sanctions imposed over the last two years.
Experts say the inflation problems come from the currency controls that the government introduced when Hugo Chavez was the president. The currency controls have left the population without any access to foreign currency.
Before the economic crisis, Venezuelans had access to foreign currency so they could travel or import products. There was a limit on how much they had access to every year but they had the option. Those options ended when the economic crisis got worse. Now, it’s the government and only a few businesses that have access to foreign currency.
Prices in the country are mostly calculated with the black market exchange rates since people and most businesses don’t have access to foreign currency. The constant increase of the black market exchange rates has led to extremely high prices.
The government has come up with measures to try to control the prices but nothing has worked so far. It recently sent soldiers to some of the biggest markets in the country to inspect.
The economic crisis seems to have no end in sight as state oil company PDVSA is seeing the effects. The company accounts for 95 percent of export earnings in Venezuela.
The IMF estimated at the beginning of the year that inflation could reach 13,000 percent for 2018. The recent numbers make their estimates look very small now. Hanke is not shocked about the difference between the estimates and data since he says no one can accurately forecast where hyperinflation is going to go or how long it is going to last.
The government has announced three minimum salary increases in 2018 alone but things have only gotten worse. A minimum salary now equals to less than $2 when calculated with the black market exchange rates.