Saturday, 23 November 2013

Venezuelan inflation

Not a good look. Steve H. Hanke, Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University, has been writing on inflation in Venezuela over at the Cato Institute. Hanke writes,
Just how big of a problem is inflation in Venezuela? The implied annual inflation rate in Venezuela is actually now in the triple digits, coming in at a whopping 283%, as shown in the chart below.

What’s more, the implied monthly inflation rate has now ramped up to 36%, as shown in the chart below. That’s dangerously close to the hyperinflation threshold of 50% per month. This is due to an accelerating depreciation of the bolivar, reflecting Venezuelan’s deteriorating economic outlook.

For the record, official government data put Venezuela’s inflation rate at a mere 50%.

So how soon will it be before Venezuela becomes the new Zimbabwe?

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