IMF Projects Venezuela Inflation Will Soar to 13,000 Percent in 2018

The International Monetary Fund sees Venezuelan inflation spiraling to 13,000 percent this year, as the crisis-torn nation prints money to tackle fiscal deficits and confidence in its currency evaporates.

That’s more than five times the inflation previously projected by the IMF, and way above the median forecast from economists surveyed by Bloomberg. The fund estimates price increases surpassed 2,400 percent last year, according to a report published Thursday by Alejandro Werner, head of the IMF’s Western Hemisphere department. That was the fastest in the world.

Venezuela has succumbed to hyperinflation combined with a prolonged recession stemming from years of mismanagement as well as faltering oil exports. In an attempt to rein in inflation, the government of President Nicolas Maduro has refused to loosen foreign-exchange controls and price caps that have exacerbated the short supply of all sorts of products, from food to medicine.

The IMF expects the Venezuelan economy to contract 15 percent this year, leading to a cumulative GDP decline of nearly 50 percent since 2013. That’s holding back the rebound of the entire region; Latin America is expected to grow 1.9 percent this year, or 2.5 percent without Venezuela. While Venezuela suppresses the regional average, at this point the impact on its neighbors’ output is “very limited,” Werner said in a press conference following the report’s release.

https://www.bloomberg.com/news/articles/2018-01-25/imf-sees-venezuela-inflation-soaring-to-13-000-percent-in-2018