There is major cause for concern about the inflation that is occurring in Venezuela. There is no end in sight to this growing inflation due to poor economic planning, high unemployment, and ever increasing public spending. Venezuela's economy depends almost entirely on their large oil reserves, with global oil prices down there is no turn around expected in the short term. Socialist President Nicolas Maduro has made no changes to correct the economic downturn. Inflation in Venezuela is expected to rise a staggering 1,642% in the year 2017.
Venezuela: the land of 500% inflation
Work Cited:
Gillespie, P. (2016, April 12). Venezuela: the land of 500% inflation. Retrieved March 21, 2017, from http://money.cnn.com/2016/04/12/news/economy/venezuela-imf-economy/
Inflation can be a very difficult thing to handle and can take great effect on others as well. As prices increase at a rapid rate you can expect that it will be a lot more difficult for a mass amount of people. That fact that Venezuela is having such a big issue with this you can only hope they would plan on defeating the issue before it gets worse. As you said though on the other hand that there is no end in sight as inflation due to poor economics and more will only continue getting worse. I found it extremely surprising that they are expecting it to rise 1,642% in the year of 2017. I would not of even thought that this was possible, but I was mistaken as the article clearly said this right from the beginning.
ReplyDeleteGreat post!
This is very interesting! It is appalling how much the inflation is expected to rise. The president needs to do something before the economy suffers too much. If it gets to the point of a depression, it will hurt all industries, not only oil. - Lorreen McCabe
ReplyDeleteIt is my suspicion, that this is a fall out of the OPEC and their attempts to shut down oil production in the shale fields. Opec has intentionally chosen to keep the price of a barrel of crude low in order to prevent the production of oil from the shale fields becoming profitable.
ReplyDeletehttps://www.nytimes.com/interactive/2017/01/09/business/energy-environment/oil-prices.html
In this they state that OPEC has been the big dog in the oil fields and that it desperately wants to keep the shale process from being a factor in production. This hurts them a LOT. This is what has kept the price of gas fairly low currently.
I would agree that this is in part do to the lower oil prices from opec nations. The one thing that the government of Venezuela can do to stop inflation is freezing prices on everything in the country.
ReplyDeleteTyler,
Deletehow do you freeze prices everything in a country. I do not see how that is possible. I can see locking in some specifics, such as gas, electricity, and food stuffs. But other things would be very difficult to do so.
President Nixon imposed a 90-day freeze in the US in 1971.
ReplyDelete