Publish in Special Reports - Wednesday, April 13, 2016
UN mission sheltering civilians after fighting in South Sudanese town. Venezuela's macro economy is now worse than that of South Sudan, according to IMF figures analyzed by Latinvex. (Photo: United Nations)
Venezuela sees worst economic performance worldwide this year.
BY JOACHIM BAMRUD
As Venezuela’s economy continues to spiral out of control, the International Monetary Fund (IMF) now estimates that the country will see a whopping 4,500 percent inflation within the next six years.
This year alone, inflation in Venezuela will likely reach a record 481 percent, beating last year’s record of 122 percent. That in turn beat the previous record of 99.87 percent 20 years ago -- in 1996.
Venezuela is projected to remain in a deep recession in 2016 … amid political uncertainty and as the renewed decline in the price of oil has deepened existing macroeconomic imbalances and pressures,” the IMF said in its latest World Economic Outlook.
This year’s estimate will be the highest in the world, according to a Latinvex analysis of IMF projections for 190 countries. South Sudan, the only other country with triple digit inflation, will likely reach a rate of 212 percent, the fund estimates.
Meanwhile, Venezuela’s economy will likely fall by 8 percent this year, the fund projects. That will be the worst result worldwide, according to the Latinvex analysis. South Sudan again will be the second-worst performer, with an estimated 7.8 percent GDP decline.
Venezuela will continue to lead the world in inflation during the next additional four years, the IMF projects. Next year, the rate will jump to 1,643 percent, then in 2017 it will likely reach 2,881 percent before jumping to 3,960 percent in 2020 and 4,505 percent in 2021, the IMF predicts.
GDP: GLOBAL LAGGARD
Venezuela will also be the worst performer worldwide when it comes to GDP growth the next three years. Although GDP will decline less the next two years than this year, the estimated projections will still be the lowest in the world, according to the Latinvex analysis.
Next year, Venezuela’s economy should decline by 4.5 percent and then 3 percent in 2018.
Meanwhile, last year’s GDP decline of 5.7 percent was the seventh-worst in the world.
In January, President Nicolas Maduro declared an 60-day economic emergency. In March he got another 60-day extension from the Supreme Court.
However, critics say none of his measures address the root causes of the crisis, including restrictions on access to dollars (which impacts imports of everything from car parts to consumer goods), price controls, record printing of money and constant attacks on private local and foreign companies. Maduro, for example, blames the private sector for the soaring prices and shortage of goods.
In one of the latest actions related to the currency restrictions, Venezuela's two main cellphone service providers Spain-based Telefonica, and Digitel are suspending long distance calling, AP reported earlier this week.
© Copyright Latinvex
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