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The economic catastrophe in Venezuela continues to grow. And not only because its gross domestic product will contract by 18% in 2018, according to the latest estimate of the International Monetary Fund (IMF). The multilateral financial agency is projecting even more bleak prospects over the unsustainable price hike and forecasting inflation of around 1 000 000% by the end of the year. year, against 13.800% in April. This is proof that money has lost its role as an intermediary in the economy.
"The situation is similar to that of Germany in 1923 or Zimbabwe in 2008," says IMF economist Alejandro Werner, who tracks the evolution of countries in the Latin American region, comparing the situation of Venezuela with other historical precedents. Prices, the agency insists, are out of control and the money is losing value at an exponential rate as demand crumbles.
A minimum wage in Venezuela is set at 5,600,000 bolivars or 1.5 dollars per month for an unofficial change (about 1.3 euros). That is, with this benefit can not even buy a box of tuna, whose value exceeds six million bolivars. The government of Nicolás Maduro periodically increases these benefits. However, the effect it has on the brand is far from mitigating the consequences of hyperinflation, since each increase automatically implies a multiplication of base basket prices.
The new estimate reflects the seriousness of this situation. situation. The money, they say of the body, has more value. This, remind technicians, does not change much for the citizen in terms of quality. According to economists, the difference between inflation of 10,000%, 100,000% or 1% – 000,000 is lower when money has already lost its function and reflects the lack of control. "The destruction of the price system is already done," insists Werner, indicating that this projection is subject to "a high degree of uncertainty".
The IMF points out that Venezuela will continue its third consecutive year in 2018 with a double-digit contraction in its economy and is in the process of losing half of its gross domestic product in recent years.
"There is no line of economic policy that points to a correction of the situation of deep economic and social crisis deplored Werner
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