Caracas: A banana would cost $21 in Venezuela a few months ago. But by the year-end, the ordinary Venezuelan will not even be able to buy a banana for the same price. The Venezuelan inflation index has sky-rocketed by 1.3 million%, and the value of the local currency Bolivar has nosedived as compared to the USD. The opposition has criticised that the financial crisis in Venezuela has occurred because of the incorrect fiscal policies of the Maduro government. Tired of the price rise, citizens have started migrating to the neighbouring countries.
The International Monetary Fund had predicted at the beginning of the year that the Inflation index in Venezuela would cross the 1 million% mark by the end of this year. It was said that the Maduro government’s inappropriate economic policies and the devaluation of Bolivar currency, as well as the use of cryptocurrency, were the reasons behind this. But as per the information given by the Venezuelan Parliament on Monday, it was announced that the inflation index had crossed 1.3 million%. The Parliament criticised that there was a major collapse in the index in the last month itself.
Germany and Zimbabwe also faced financial crises in the years 1923 and 2000 respectively. After the First World War, the German currency, Mark had minimal or almost no value. The conversion rate of the Mark had reached 1 million Marks to a USD. But the International Monetary Fund had warned that Venezuela is suffering from a very major economic crisis, and the German crisis in 1923 was nothing compared to the Venezuelan crisis.
If the Venezuelan inflation index reaches 1 million% by the end of the year, the difficulties faced by the Maduro government will increase further. The IMF had also warned that if the Maduro government did not change its economic policies, the index could scale the heights of 10 million%. Till a few days ago, the Venezuelan people were surviving using barters. But it is claimed that this also would be difficult in the future.
Meanwhile, the Maduro government is being criticised by the opposition of engaging in war exercises with Russia at a time when the Venezuelan currency is sliding, and the inflation index is sky-rocketing.