Venezuela's 2019 inflation to hit 10m percent
IMF estimates inflation for 2018 to reach 1.37m percent, and as high as 10m percent in 2019.Valentina Spiridonova
Consumer prices in Venezuela have risen by nearly 500,000 percent over the past year, with the International Monetary Fund (IMF) warning that inflation may reach 10m percent in 2019. The central bank stopped releasing figures on inflation nearly 3 years ago, but Angel Alvarado, a member of the opposition-run congress, told media that hyperinflation reached 488,865% in the 12 months ending in September.
In response, the IMF said on Tuesday in its World Economic Outlook that Venezuela’s hyperinflation will worsen rapidly in 2019, fueled by monetary financing of large fiscal deficits and loss of confidence in the currency.
“Venezuela’s economy continues to decline for the fifth consecutive year, following a 14% drop [in real GDP] in 2017,” the report said. “Real GDP is projected to shrink by 18% in 2018 and a further 5% in 2019, driven by plummeting oil production, and political and social instability.”
In that regard the IMF estimates that inflation for 2018 will reach 1.37m percent, and as high as 10m percent in 2019. The country’s unemployment rate is forecast to reach 34.3% by the end of the year and grow to 38% in 2019.
After years of economic mismanagement, and with the vital oil industry nearly at a standstill, Venezuela has seen tens of thousands of people flee the country daily, increasingly desperate to find food and medicines, flooding into neighboring Colombia and Brazil. In an effort to stabilise prices, President Nicolas Maduro in August cut five zeros off the ailing bolivar currency, boosted the minimum wage by 3,000 percent, and pegged salaries to an elusive state-backed cryptocurrency.