July 20, 2024
Venezuela hyperinflation hits 10 million percent. ‘Shock therapy’ may be only chance to undo the economic damage
View of damages in a supermarket in Valencia, Carabobo State, on May 5, 2017, the day after anti-government protesters looted stores, set fire to cars and clashed with police, leaving at least five people injured and one dead.
View of damages in a supermarket in Valencia, Carabobo State, on May 5, 2017, the day after anti-government protesters looted stores, set fire to cars and clashed with police, leaving at least five people injured and one dead.

Venezuela’s crisis has been marked by corruption, hyperinflation, one of the world’s highest homicide rates, food and medicine shortages and the largest exodus “in the recent history of Latin America,” according to the UN Refugee Agency.

Its chances to recover may start with President Nicolas Maduro stepping down or being forcibly removed — either by the opposition or through foreign military intervention. But that would just be the first step to get the ruined economy on the road to recovery. A major course of economic shock therapy will be required.

Venezuela’s hyperinflation rate increased from 9,029 percent to 10 million percent since 2018, according to the International Monetary Fund, though it is expected to decline to back below 1 million percent due to recent moves by the country’s central bank, according to a recent IMF forecast.

But the economic situation remains dire: The IMF says the cumulative decline of the Venezuelan economy since 2013 will reach 65% this year — for 2019 the annual decline forecast has increased from 25% to 35%. The five-year contraction is one of the worst in the world over the past half century and one of the few that was not caused by armed conflicts or natural disasters, the IMF stated earlier this week.

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See Also:

(1) Venezuela: the political stand-off fuelling an economic collapse

(2) President Trump Losing Patience With Venezuela’s Maduro

(3) Former spy chief in Venezuela to be extradited to U.S. to face drug-trafficking charges

(4) Venezuela: A Mafia State

(5) Venezuelan Elites Accused of Food Corruption Scheme

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