Venezuela: Hyperinflation and lack of vital products deepen economic catastrophe

EPA/Cristian Hernandez

Demonstrator hold signs calling for a recall referendum and chant slogans during a protest against Venezuelan President Nicolas Maduro's government, outside the Supreme Tribunal of Justice (TSJ), in Caracas, Venezuela, 25 May 2016. The opposition staged a protest against a Venezuelan Supreme Court ruling that bans 'unauthorized acts, marches, protests (and) gatherings,' as well as 'violent demonstrations' at election offices. The opposition wants to hold a referendum to recall President Nicolas Maduro from office, but the government contends that it will be impossible to hold the referendum this year.

The International Monetary Fund (IMF) had predicted that inflation in Venezuela will increase by 720% in 2016, while many media report that the national market is running out of food and medicines


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The economic catastrophe in Venezuela is getting deeper because of the hyperinflation and the lack of vital products.

The International Monetary Fund (IMF) had predicted that inflation in Venezuela will hit 720% this year while LA Times reported that according to some local economic analysts, the inflation rate might increase even more. In the meantime, CNN Money reported that Venezuela is running out of food and medicines.

“There’s a shortage of everything at some level,” Ricardo Cusanno, vice president of Venezuela’s Chamber of Commerce said in an interview with the CNN. He added that 85% of companies in the country have halted production to some extent. Most of the companies are facing hard times in importing the raw materials needed to continue production.

LA Times did an interview with Maria Linares, a 42-year-old single mother who works as a civil servant. The newspaper reported that her salary is 27,000 bolivars, which under the official exchange rate of 10 bolivars to the dollar is $2,700. However, in the black market, one dollar equals close to 1,000 bolivars, which means that Linares earns just $27 a month. Linares told the LA Times journalist, that she spends almost all of her salary in groceries to feed her children. “The last time we had chicken was in December,” she said.

OAS calls for emergency meeting to discuss about Venezuela’s “grave alterations of democratic order”

Yesterday, the head of the Organisation Of American States (OAS), Luis Almagro, called for an emergency meeting of regional governments to evaluate Venezuela’s respect for democracy, saying that the crisis-hit country had suffered “grave alterations of democratic order.”

Venezuela could be suspended by the Washington based organisation, if two-thirds of its 34 member states vote that the country’s leadership has performed un-democratic actions.

MercoPress reported that Caracas has lost the support of the two major Southern American countries, Brazil and Argentina but the populist government still enjoys strong support from small Caribbean and Central American nations. The President of Venezuela, Nicolas Maduro accused Almagro of conducting a foreign “intervention” in his country by invoking the body’s Democratic Charter.

 

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