The inflation rate in Venezuela is expected to hit 480 percent this year and 1,600 percent by 2017.
This is yet another story in a slew of bad news for Venezuela. Venezuelans are dying of treatable illnesses due to shortages of medical supplies and are experiencing widespread food shortages. Inflation has become so bad that the government ordered millions of pounds of provisions (in the form of the Venezuelan currency, the Bolivar) to be dropped by plane-load across the nation.
The government has even put its own military in charge of the country’s food supplies.
Economists predict the nation will soon have to ask the International Monetary Fund (IMF) for a bailout, despite the fact that nearly a decade ago the former socialist leader of Venezuela, Hugo Chávez, cut ties with the IMF completely and the nation has made no efforts to reestablish a relationship (RELATED: Here Are Five Ways The Crisis In Venezuela Could End).
The IMF has urged Caracas — the capital — to “reestablish a relationship,” but has stated that the Venezuelan authorities have made no effort to contact authorities.
China has been steadily supplying Venezuela with cheap loans — a reported $10 billion last year alone — which have merely kept the fledgling Venezuelan economy afloat. But economists say that the struggling South American country requires “deep policy overhauls,” not loans, in order to “repair the broken economy.”
Gerry Rice, an IMF spokesperson, says that even if Venezuela reached out to the IMF, “it would be difficult to give advice without substantive discussions.”
The IMF gives a speculative assessment of the Venezuelan economy, noting “political uncertainty” and “existing macroeconomic imbalances and pressures.”
Alejandro Werner, Chief of the IMF Western Hemisphere operations, also points out that “a lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods.”
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