IMF: Venezuela’s Inflation To Reach 10 Million Percent Next Year

People buy food and other staple goods inside a supermarket in Caracas, Venezuela, July 25, 2017. REUTERS/Ueslei Marcelino

A report from the IMF on Tuesday estimated that Venezuela’s inflation will reach ten million percent in 2019. The report comes as the South American nation continues to struggle with its economic and political crisis.

Venezuela, which is going through its worst crisis in history, has already reached record levels of inflation. The report of the World Economic Outlook estimates that prices will rise to even higher levels by the end of the year.

IMF said a few months ago that inflation in the country will reach one million percent by the end of 2018. The IMF has updated the numbers to even higher levels. The organization now estimates that inflation will reach 1.37 million percent this year.

Venezuela’s economic and political crisis has forced millions of Venezuelans to flee the country. The situation continues to get worse in the country as recent changes by the government appear to have no effect.

Venezuela’s economy has quickly declined since the drop in oil prices four years ago. Experts say the measures and exchange controls by the government have contributed to the collapse of the country, which was one of the richest in Latin America just a few years ago.

Back in July, the organization compared the inflation to that of Zimbabwe in the early 2000s and Germany in the 1920s. The hyperinflation has left Venezuelans with less and less money and less basic products such as medicine and food.

The government has attempted to stop the inflation by introducing new bills and removing zeros off the currency. The attempts appear to have had no effect so far as prices continue to rise.

It is not the first time that the government announces big changes to keep up with the inflation. In late 2016, the government decided to remove the country’s biggest bill from circulation. The announcement sparked chaos across the country as thousands quickly visited banks to get rid of the bill. The problems continued later on as the new bills introduced by the government could not be found in some cities.

The Venezuelan government has blamed some of its economic problems on the US and other countries that have announced sanctions against them. Experts say most of the problems come from the strict exchange controls that the government introduced in the early 2000s.

The collapse has left the country with shortages in just about everything. Basic goods such as food and medicine are difficult to find. A high percentage of the population doesn’t have access to most basic goods since the salaries are nowhere close to the prices.

The government has raised the minimum salary several times in recent years but they continue to fall short against the inflation. The opposition says the daily inflation in September was four percent.

The Central Bank stopped releasing inflation data years ago and the only numbers being released come from the opposition. The IMF has estimated one million percent for 2018 but next year could be even worse for the South American nation if inflation reaches ten million percent.

Maduro has criticized the IMF in the past and said that the organization is an agent of the US. He also says the country is the victim of an economic war created by the US. Maduro was re-elected earlier this year but many have doubts about the results.