Venezuela Inflation May Rise Beyond 2,300%

Venezuela’s triple-digit annual inflation rate is set to jump to more than 2,300% in 2018, the highest estimate for any country tracked by the International Monetary Fund.

An intensifying political crisis that’s spiraled since 2014 has weighed heavily on economic activity. Gross domestic product is expected to contract 6% next year, after shrinking an estimated 12% in 2017, the IMF said in its latest World Economic Outlook report published Tuesday, Bloomberg reported.

While Venezuela’s central bank stopped publishing inflation data in December 2015, the IMF argues the country’s consumer prices are estimated to leap 2,349.3% in 2018, the highest in their estimates, followed by the Democratic Republic of the Congo’s 44%.

As oil production declines and uncertainty increases, unemployment is forecast to increase to about 30% in 2018, also the highest and followed by South Africa’s 28% and Greece’s 21%.

The Bolivarian Republic is not current with most of its key economic statistics, leaving economists scant data to crunch. Before Venezuela’s new legislative super body took over the functions of the country’s only remaining opposition-run institution this year, the sidelined National Assembly had started publishing its own inflation index due to the lack of official data. Bloomberg’s Cafe Con Leche Index puts the annual rate at 650%.

Last month the Trump administration leveled sanctions against the impoverished nation, thereby restricting its ability to borrow money from US creditors. The United States has not banned Venezuelan oil, but that threat looms as well.

Venezuela’s debt is growing, and it is increasingly unable to make interest payments. Printing money is no longer an option which it has already done.