Sunday 25 July 2021

Venezuela: Surviving in the Country with the Worst Hyperinflation in History

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How do you survive in a country where inflation can reach 1,000,000%? That is the current situation in Venezuela, the country with the largest oil reserves on the planet, but which became one of the poorest in the world thanks to the arrival of socialism.

Venezuela’s hyperinflation has forced millions to seek better opportunities abroad (Twitter).

The International Monetary Fund (IMF) was forced to revise its estimate of the Venezuelan economy. Although at the end of 2017 it indicated that the country governed by Nicolas Maduro would reach an inflation level of 13,000%, this week it warned that inflation will hit 1,000,000%.

In Venezuela, the minimum monthly wage is USD $1; however, one kilo of white cheese costs 6,400,000 bolivares (USD $1.80), that is, more than one minimum monthly salary.

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A decade ago, when the economic decline began, many economists argued that Venezuela could experience hyperinflation thanks to its oil wealth. However, thanks to socialism mismanagement, they not only destroyed the economy but the production of crude oil as well.

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The Venezuelan economist, José Toro Hardy, explained to the PanAm Post that with the new estimate of the IMF, Venezuela is among the highest inflation cases that humanity has known in its entire history.

He noted that the economic crisis in Venezuela is due to “aberrant public policies” full of price controls.

This is the result of a nonsensical public policy and unrestrained populism. The government of Venezuela has incurred an unmanageable fiscal deficit to finance the cash flow of PDVSA, which is the state-controlled oil company.

“The government has resorted to demanding from the Central Bank of Venezuela that they issue vasts quantities of money without necessary backing; that money is incorporated into the country’s money supply and results in a demand for goods. But as in the country, there are no goods because they have destroyed the country’s productive capacity through expropriations, price controls, through all kinds of socialist measures: what they have achieved is that there is a shortage of everything. In Venezuela there are no medicines, there is no food, but the result is that there is this huge money supply, seeking to buy goods that do not exist, thus the key result is that prices go up,” he explained.

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Currently, 91% of Venezuelan families live below the poverty line, and 65% of families face extreme poverty.

“It is very difficult to live in these conditions, first because the country has become impoverished, because there is no salary adjustment 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.

Before, the main reason why Venezuelans emigrated was due to the insecurity and the high levels of violence in the South American country; now the main reason is because the Venezuelan economy is unsustainable.

Source: Panampost.com

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Article originally appeared on Today Venezuela and is republished here with permission.

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Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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Article originally appeared on Today Venezuela and is republished here with permission.

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