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Prospects for Venezuela are poor. The IMF talks about one of the biggest crises of the modern economy – and compares the situation in the South American state with hyperinflation in Germany in 1923.
(dpa) That's one According to the International Monetary Fund (IMF), the severe economic crisis is rife in Venezuela and is expected to reach a million percent by the end of of the year. The development in the South American country was comparable to the fall in prices in the Weimar Republic in Germany in the 1923 crisis year, the IMF said Monday in a perspective for the Latin American countries . The government is still expecting inflation of 13,000% by the end of the year. The report's author, IMF analyst Alejandro Werner, already called the Venezuelan crisis one of the most important in the history of the modern economy
in In this report, the IMF estimates that the government of President Nicolás Maduro continues to fund the amount of money spent – which further accelerates inflation, Werner said. He also predicted an 18% drop in gross domestic product in 2018. By April, 15 percent had come out. One reason for this is a significant drop in oil production in Venezuela.
Developments in Venezuela evoke memories of hyperinflation in Germany, according to Werner. After the loss of the First World War (1914-1918), the alternating governments of the Weimar Republic financed the huge costs of post-war debt and the rise of paper money. At the end of the war, the empire was worth 150 billion marks in chalk. Instead of acting in financial terms, governments have printed bank notes. One liter of milk soon cost 26 billion Marks, a 105 billion loaf.
Socialist Venezuela has suffered from a severe economic and supply crisis for years because of mismanagement, corruption and relatively low oil prices. Although there are the largest oil reserves in the world, more and more people are dying of hunger. There is a lack of foreign currency to import food and necessities.
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