BOGOTA – Venezuela’s galloping inflation will reach a million per cent by the end of this year, the International Monetary Fund (IMF) said Monday.
“We expect the government to continue to run wide fiscal deficits financed entirely by an expansion in base money, which will continue to fuel an acceleration of inflation as money demand continues to collapse,” IMF said in an Outlook for the Americas report.
Venezuela’s real gross domestic product, meanwhile, will fall by about 18 per cent – the third consecutive year of double-digit decline – driven largely by a significant drop in oil production, according to IMF.
Earlier this month, the country’s National Assembly put the inflation rate at 46,306 per cent over 12 months ending in June.
A drop in the price of oil – Venezuela’s main export – and years of mismanagement have contributed to a massive economic crisis in the South American country, which is suffering from widespread shortages of basic goods. -DPA