The International Monetary Fund (IMF) has published a report that predicts and inflation rate of 1.37million percent for Venezuela by the end of 2018. This is an increased figure from the forecast of 1million percent made in July 2018.
The economic woes of Venezuela has attracted global attention over the past few years. Fueled by dwindling oil fortunes in a politically unstable society, the nation’s currency has continued to depreciate in value with no genuine signs of recovery in sight.
Despite an economic forecast that remains consistent from the IMF’s July 2018 report, the expected depreciation of the Bolivar will be as a result of a falling gross domestic product. Venezuela’s GDP is forecasted to shrink by 18 percent in 2018, coinciding with a third straight year of double-digit decline amidst falling oil revenue and political instability.
The Nicolas Maduro led government has taken a number of steps to fight against a failing economy. One of the approaches taken, which appears different from the known conventional systems involves the creation of a national digital currency, Petro. This digital currency which will be backed by the nation’s gas reserves is expected to be made publicly available sometime in November.
The extent of inflation and economic crisis in Venezuela has given rise to a rampant shortage in food and medical supplies, creating general hardship for citizens of the country. A 24 times increase in minimum wage by Maduro between 2013 and 2018 has done little in alleviating the sufferings of the people.
While Venezuela’s situation worsens, economists believe that a lasting solution can only be achieved by lifting the complicate web of price and currency controls that currently exists in Maduro’s government. So far, such recommendations have been met with stiff resistance.
How long this will last may depend on the outcome of the unconventional models being undertaken by the government. Otherwise, something greater than the present government might eventually determine the fate of Venezuela and her citizens.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.