by WorldTribune Staff, July 23, 2018
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.
Related: Oil secures Socialist Venezuela’s elite as refugees flee failed state, July 20, 2018
“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.
Socialist President Nicolas Maduro often blames Venezuela’s poor economy on an economic war that he says is being waged by the United States and Europe.
Maduro won a second six-year term as president in a May election that many nations don’t recognize as legitimate.