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Wednesday, October 10, 2018

Venezuela’s Inflation Rate Projected to Hit 10,000,000% in 2019

Inflation in Venezuela is projected to reach 10,000,000% next year, as the economy collapses and the government grows increasingly authoritarian.

Venezuela, the country with the lowest wages in the region and an unprecedented humanitarian crisis, has broken the record for the highest inflation in the Americas, to such an extent that by 2019 hyperinflation will reach the astounding figure of 10,000,000%. This is due, according to the Venezuelan economist José Toro Hardy, to “aberrant public policies” full of state controls.

Toro Hardy explained to the PanAm Post that with the IMF’s new estimate, Venezuela is among the worst inflation cases that humanity has known in its entire history. He explained:

This is the result of aberrant public policies and unrestrained populism. The government of Venezuela has incurred an unmanageable fiscal deficit to finance the cash flow of PDVSA, which is the oil company of the market.

The Government has resorted to demanding from the Central Bank of Venezuela that it make immense issues of money without support; that money is incorporated into the country’s money supply and, consequently, demands goods. But since there are no goods to be had, because they have destroyed the productive apparatus through expropriations, price controls, through all kinds of socialist measures, what they have achieved is that there is a shortage of absolutely anything. In Venezuela there are no medicines, there is no food, but the result is that with this huge money supply demanding goods that do not exist, the only thing that is achieved is that prices go up. 

Given this situation, generated by Chavismo, 91% of Venezuelan families live below the poverty line, and 65% of them face extreme poverty.

“It is very difficult to live in these conditions, first because the country has become impoverished, because there is no salary that can withstand this increase in prices, and that adds to the scarcity of almost any product. People are getting desperate and living in terrible anguish and for that reason, many Venezuelans simply choose to leave the country,” notes Hardy Toro.

This article is reprinted with permission from the PanAm Post.

  • Sabrina Martín is a Venezuelan journalist, commentator, and editor based in Valencia with experience in corporate communication. Follow @SabrinaMartinR.