Venezuela’s inflation rate could surpass 2,000 percent by year’s end — worse than war-ravaged economies like South Sudan and Libya — as the once-wealthy nation continues to be mired in a deep economic crisis.
In a report issued Thursday, the opposition-controlled National Assembly said that the inflation in November alone was 56.7 percent and that prices during the first 11 months of the year had increased a staggering 1,369 percent.
The Nicolás Maduro administration will likely dispute the figures, but Venezuela’s Central Bank — the longtime source for the information — quit releasing regular inflation data in 2015.
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“Without a doubt we’re in the middle of hyperinflation which makes Venezuelans poorer every day and makes the Bolivar [currency] weaker by the day,” Congressman Ángel Alvarado said in a statement, adding that he expected inflation to be near 2,100 percent by year’s end.
The National Assembly Consumer Price Index claims that it tracks the same basket of goods and uses the same methodology that that the Central Bank previously relied on.
The International Monetary Fund earlier this year forecast that annual inflation would hit 635 percent.
But Steve Hanke, a professor of applied economics at Johns Hopkins University and advisor to former Venezuelan President Rafael Caldera from 1995-1996, said the lower figures don’t capture the scope of the problem.
According to his data, the country’s annual inflation on Thursday was running at 2,727 percent.
“This is definitely the world’s highest inflation,” he said. “There’s no one even close.”
The second-most inflationary economy is thought to be South Sudan at 107 percent.
Venezuela has been trying to stop inflation for years, but a toxic mix of currency and price controls have only exacerbated speculation and fueled the black market.
In recent days the government has forced some businesses to hold holiday fire sales, threatening to fine those that don’t comply — despite protestations that the regulations are killing the private sector and creating more inflationary shortages.
Despite sitting on the world’s largest oil reserves, the country has seen declining production and revenue, which have gutted the economy and produced waves of food and medicine shortages.
The administration often blames its woes on “economic warfare” being waged by the opposition. More recently, it has been able to point to U.S. financial sanctions and corruption within the ranks of its all-important oil industry.
In the meantime, average Venezuelans have been hammered by the price increases. Food, in particular, often becomes scarce or too expensive — despite government price controls.
According to the National Assembly figures, the average family spends about 80 percent of their income on food.
“Every day there are more disturbing reports from the fathers and mothers of Venezuelans who can’t give their children enough to eat,” Álvarado said. “Even more worrying is those [children] they have lost due to malnutrition.”
Hanke said there’s a silver bullet for the country’s inflation crisis: adopting the dollar as the official currency, as Ecuador did in the 2000 as it was staggering under hyperinflation.
“The next day you would wake up and there would be very small inflation,” he said.
Follow Jim Wyss on Twitter @jimwyss