Venezuela's looming economic catastrophe, in one graphic
There are a lot of stats you can cite to describe the dysfunction gripping Venezuela at the moment.
Almost 90% of the country says their incomes are insufficient to meet their food needs. Auto production shriveled 86% in the first half of the year, to just 10 units a day. The country's production of oil - which accounts for 95% of its export earnings - fell to a 13-year low in June (and its likely to decline further). Approval for President Nicolas Maduro shrunk to 23.3% in May, the lowest since October 2015.
Perhaps the most damning figure is Venezuela's inflation, which the IMF sees rising close to 4,000% by 2020, as unemployment tops 20%, according to price-calculation website How Much, which produced the graphic below:
Venezuela's outlandish inflation has proven difficult to pin down. The end-of-year inflation rate of 720% forecast by the IMF for 2016 vastly outstrips the median of 184% derived from a Bloomberg survey of economists in January, and it exceeds the high of 700% inflation predicted by Nomura Securities.
Consumer-price inflation is supposed to hit 481% this year and to top 1,600% next year, according to IMF stats. Venezuela's central bank said in February that inflation for 2015 rose to 180% and the economy contracted by 5.7%.
As How Much notes, the rate of Venezuela's inflation increase is likely to slow (3.5 times between 2016 and 2017 to 1.1 times between 2019 and 2020), and, according David Smilde, a Tulane professor based in Venezuela, the country's central bank has slowed the amount of money it puts out.
REUTERS/Carlos Eduardo Ramirez
"Yet inflation has continued apace, most likely motored by the decline in production and importation of goods," Smilde writes. "This has created a scarcity of liquidity at many levels of the economy, with banks having daily withdrawal caps."
Shrinking supplies of money, coupled with sky-high prices and rampant scarcity of consumer goods, has created a much more immediate problem for Venezuelans: no food.
This past weekend, more than 120,000 Venezuelans swarmed across the western border, mobbing shops and groceries in the Colombian city of Cúcuta.
That much-needed outlet appears to have been short-lived, as the Colombian foreign minister said on Tuesday that there would be no more temporary openings of the border, which has been closed for almost a year; instead, the two countries will continue negotiating to open the frontier permanently.
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