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A few days after the International Monetary Fund (IMF) issued a striking forecast – inflation will reach 1 to 000,000% in Venezuela this year-, the actual data suggests that even this number may be too low.
The price of a cup of coffee measured by the Bloomberg Coffee with Milk Index reached 2,000,000 bolivars this week, compared to 1,400,000 bolivars a week. past. At the end of April, the price was 190,000 bolivars.
This three-month increase equates to an annualized rate of 1 & 227.638%. (The inflation rate of the last 12 months, although it is still out of control, is much lower for the moment: 86.857%).
In his report published this week, the IMF compared Venezuela's economic crisis to one of the worst in history, such as that of Germany in the 1920s and Zimbabwe there ten years ago.
Hyperinflation in Venezuela took root over the past year, plunging the population even deeper into poverty, while the president Nicolás Maduro he stepped up the frenzied printing policies of his government. This year, for example, the minimum wage has been increased four times, to reach about 5,000,000 bolivars a month, even if it does not even buy three cups of coffee.
The government, which did not want to put in place harsh measures To stabilize the economy – for example by reducing subsidies for heavy fuels – it used policies that are not aimed at basically only to cover the problem.
The most recent plan is to issue a new currency that will eliminate the zeros from the bills that currently exist in circulation. It was expected that the new ticket with three zeros less so at the beginning of the month of August.
But Maduro announced Wednesday night that the launch would be delayed by a few weeks and that five zeros would be removed, instead of three.
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