Financial Education - Loss of the purchasing value of currencies and economic consequences

Within the framework of these premises, we will address that a large part of the economic crisis submerged in the Venezuelan territory has been a consequence of the implementation of economic, financial and investment policies that have been the cause of deviations, causing an economic collapse, provoking the loss of the purchasing value of the currency and subsequently generating economic, political, social and commercial consequences.

To understand more clearly and precisely what the productive sector incurs it is of great importance to be clear that inflation is defined as the economic process caused by the existing imbalance between production, supply and demand, therefore to further understand this process and expand it.

According to the economics dictionary via online economista.es: defines inflation as: "the generalized and sustained increase in the prices of goods and services in a country over a sustained period of time, usually one year. When the general price level rises, fewer goods and services are purchased with each unit of currency".

In this specific order, the inflationary phenomenon has been the cause of the depletion of the Venezuelan economic growth rate, which generates a loss and abandonment of several productive sectors of the country, generating diverse consequences of which a great number of disastrous and direct characteristics are composed.

Among these the loss of the purchasing value of the currency, continuous increase and rise of prices in the acquisition, purchase and sale of goods and services, low production levels, mismatch and everything related to money or circulating items are critical effects in countries with inflation levels, this is the reason why the companies dedicated to the development of automotive activities have a difficult management in such an unstable market.