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:
— How Much (@howmuch_net) June 2, 2016
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.
“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.