Venezuela’s Economic Crisis Keeps Getting Worse

Venezuela’s Economic Crisis Keeps Getting Worse

In 2018 Venezuela is struggling though the hemisphere’s worst economic problems. Inflation is rapidly spiraling towards crisis levels and everyday economic activity continues to be severely encumbered by a nonsensical system of currency controls. In 2018 Venezuela’s GDP is expected to contract by double digits for the third straight consecutive year. Economic output in Venezuela fell by 16% in 2016, 14% in 2017, and is expected to drop by 15% this year. Meanwhile, after jumping from 112% in 2015 to 2,400% last year, inflation in Venezuela is expected to hit five-digit levels in 2018.

Venezuela’s slow-burning economic collapse is quickly becoming a regional humanitarian crisis as Venezuelans flee in ever larger numbers, looking for refuge in neighboring and nearby countries. More than 600,000 Venezuelans have already fled their country and sought asylum in Colombia.

The economic dynamics in Venezuela are also causing major problems for the private sector. Major multinational companies such as General Motors, Pepsi, Delta, and IBM have all reported serious problems relating to their operations in Venezuela. McDonalds continues to operate in Venezuela, in spite of the fact that according to The Economist‘s Big Mac Index, Venezuela’s currency has lost 99.9% of its dollar value over the past two years.

I reached out to Jason Marczak, the Director of the Adrienne Arscht Latin America Center, at the Atlantic Council, a Washington D.C.-based think-tank, to ask about Venezuela’s trajectory in 2018.

Source: www.forbes.com/sites/nathanielparishflannery/2018/03/22/venezuelas-economic-crisis-worsens-in-2018/