26735
Venezuela Moving Toward 1,000% Inflation
World Economy

Venezuela Moving Toward 1,000% Inflation

Venezuela is suffering the deepest economic crisis in its history with output expected to contract 9.1% this year, Barclays Plc says.
The economic contraction will likely reach 16.5% between 2014 and 2016, while inflation over that period will exceed 1,000%, Barclays wrote in a note to clients, Bloomberg reported.
“It is impossible to understand why the government is not reacting to this reality, why it has not taken measures to alleviate the economic distortions that are destroying the real income of Venezuelans,” Barclays said.
President Nicolas Maduro will not likely announce any changes in economic policy before congressional elections Dec. 6, the bank said. With support for the ruling Socialist party at around 19%, the country is politically divided as it also battles low prices for oil, which accounts for 95% government export revenue.
“A weak president who will have lost an election in the middle of a very strong economic crisis will not be able to take any fiscal measures,” Barclays said. “The probability of a political transition in Venezuela seems to be much higher than what the market has been pricing.”
Instead of taking fiscal measures, the government is selling all its liquid assets to maintain an “extremely inefficient” exchange rate system and pay the external debt, Barclays said, adding that it would likely have enough money to pay its foreign debt at least through the first quarter of next year with a moderate increase in oil prices and further cut in imports.
“All the main political actors appear to be thinking only of the near term, and there is no clarity about what they will do after the elections, leaving a very uncertain scenario for 2016,” the bank said.

 

Short URL : https://goo.gl/PT41MU
  1. https://goo.gl/4mfoiR
  • https://goo.gl/Yur5uK
  • https://goo.gl/Hal0Bw
  • https://goo.gl/VfUcXs
  • https://goo.gl/InZU0Y

You can also read ...

Trade Deficit Reflects Indonesia’s Production Needs
Finance Minister Mulyani Indarwati commented on the data...
Cyber threats are ever-evolving.
The White House released a report that found that the economic...
Uganda Cuts Rate
Bank of Uganda announced a cut in the Central Bank rate by 0.5...
India Coal Import Up
India’s coal import increased by 12.4% to 18.49 million tons...
BSP said the planned RRR cuts are part of the bank’s financial market reforms.
The Bangko Sentral ng Pilipinas said it was reducing banks’...
Global Investors Target Zimbabwe Energy Sector
Zimbabwe has become a magnet for billionaire global firms such...
Switzerland Introduces Regulations on ICOs
Swiss Financial Market Supervisory Authority, a Swiss...
Lagarde Backs Creation of European Monetary Fund
International Monetary Fund chief Christine Lagarde has no...

Trending

Googleplus