hyperinflation in Venezuela year 2018

realityve (29)in #venezuela • 6 years ago

This year has been hard for Venezuelan people. So far the inflation has increased by 897% this year, every day the purchasing power of the local Bolivar currency becomes less.

The price of the dollar has increased drastically this year due to the economic model, if this model continues, the inflation percentage could pass the five digits by Christmas.

The effects of this uncontrolled increase are devastating. The constant price increases reduce the efficiency and productivity of the economy and they negatively affect the income of every household, because every time that the prices increase the Venezuelans become poorer.

It is important to highlight that the monthly salary is only 2.555.000 Bolivar (just a little more than 1 dollar, it's not a joke). Today 1 dollar has a cost of up to 1.921.079,07 BsF, this amount can vary during the day.

1$ in Bolívares Fuertes

Under the policies of this government any increase in the prices and the exchange rate is inconceivable. The authorities have no interest in stopping the hyperinflation and even if they would, they aren't showing the technical capacity to do so. With this system the Bolivar will become a useless currency and the economy may well be reduced to bartering. The people will suffer and wounds will be opened that will take generations to close.

The case of Venezuela is complicated, the fiscal gap cannot be closed by cutting public spending, so now the public hospitals do not work. The public schools and the others functions of the state have collapsed. The gap cannot be closed on the income side, the oil production is collapsing and a great part of Venezuelan business is on the edge of bankruptcy, they can't pay the taxes anymore.

Only a new government can change the situation of the country, it has to be willing to receive funding from international organizations such as the International Monetary Fund, only then could they build trust. The current government can’t and doesn’t want to pay Therefore the current government either leaves, or the bolivar will go into history just as the Zimbabwean dollar, with a few more zeros, a coffee could cost what was previously earned in the lottery.