All knowledge about effects of Inflation in Venezuela

All knowledge about effects of Inflation in Venezuela.

1. INFLATION IN VENEZUELA Presented by: Nyaysi Shukla, Riya Mahapatra, Kishan Ram Sahu and Chandrani Shil

2. VENEZUELA The economy of Venezuela is based primarily on petroleum. Venezuela is the 25 th largest producer of oil in the world and the 8 th largest member of OPEC(Organization of the Petroleum Exporting Countries). Venezuela also manufactures and exports heavy industry products such as steel, aluminium , and cement. Other notable manufacturing includes electronics and automobiles as well as beverages and foodstuffs. Agriculture in Venezuela accounts for approximately 4.7% of GDP, 7.3% of the labor force and at least one fourth of Venezuela’s land area. Venezuela exports rice, corn, fish, tropical fruit, coffee, pork and beef. Venezuela has an estimated US$14.3 trillion worth of natural resources and is not self-sufficient in most areas of agriculture. Exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of those exports.

3. JOURNEY TO ATTAIN INFLATION Venezuela’s journey from a relatively prosperous nation to a country experiencing hyperinflation is marked by a combination of factors spanning several decades: Oil dependency : #heavily reliant on oil exports #source of revenue #dependency made oil prices fluctuations 2) Political instability : #dictatotship #frequent changes in government 3) Corruption and Mismanagement : #caused economic collapse #hyperinflation, shortages of basic goods and a shrinking economy caused by rampant corruption in oil industry.

4. 4) Economic policies: # to diversify economy # reduce dependency on oil 5) Bolivarian Revolution : #turning point marked by the election of Hugo Chavez #implementation of socialist policies 6) Economic decline : #mismanagement #corruption #falling oil prices 7) Hyperinflation : # experienced by the mid 2010s # fueled by excessive money printing, economic mismanagement

5. Inflation Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. According to experts, Venezuela’s economy began to experience hyperinflation during the first year of Nicolas Maduro’s presidency. Inflation rate in Venezuela decreased to 107.40 percent in January from 189.80 percent in December of 2023. Inflation rate in Venezuela averaged 3611.54 percent from 1973 until 2024, reaching an all time high of 344509.50 percent in February of 2019 and a record low of 3.22 percent in February of 1973.

6. Causes for Inflation The cost of goods and the value of currency Playing the currency market Anti-democratic governance Corruption Mismanagement of the economy Unemployment Covid-19 Venezuelan debt Economic sanctions

7. Impacts of Inflation By 2017, hunger had escalated to the point that people do not have enough income to meet their basic food needs. Venezuela led the world in murder rates, with 81.4 per 100,000 people killed in 2018, making it the third most violent country in the world. Unemployment has been increasing in the years of hyperinflation with the 2019 rate seen as Venezuela’s highest since the end of the Bosnian War in 1995. Around 5.4 million people, nearly one-sixth of the country’s population, had left the country, making it one of the largest migrant crises in world history. Infant mortality rates had increased by more than 40% since 2008, one third of the population was classified as food-insecure by the World Food Programme , and nearly three-quarters of the population had lost weight due to lack of food.

8. INTERNATIONAL RESPONSE There are a variety of reactions, including sanctions imposed by certain countries and international organizations, as well as humanitarian aid efforts: Sanctions : #imposed by US, Canada and the European Union #involve asset freezes and travel bans Oil Sanctions : #imposed by US on Venezuela’s oil sector #aim was to limit the government’s access to revenue from oil exports International Organization : #technical assistance and advice offered by International Monetary Fund (IMF) Humanitarian Aid : #it includes food, medical supplies, and other essential items. Diplomatic Efforts : #aimed to facilitate dialogue between the Venezuelan government and the opposition to find a peaceful resolution to the crisis.

9. Measures to control the inflation Informal dollarization Petro crypto currency Bolivar Increase in employment Stabilizing the foreign and country policy Introduction of higher denomination banknotes Reduction in crime rates and corruption Boosting the tourism

10. Conclusion Finally we can conclude the topic by keeping in mind that the wrong decisions of government policy always leads to inflation. As the public sector is also responsible for hyper inflation. Compared to last year country has adapted many measures to control inflation. Consulting IMF, World Bank and financial experts from neighbouring countries have reduced the inflation rate.