Venezuela data reveals economic chaos

Demonstrators clash with members of Venezuelan National Guard

Inflation hit 130,000 per cent in Venezuela last year, the country’s central bank has said in a rare official acknowledgement that the economy is in meltdown .

In a series of spreadsheets published on its website, the bank said that Venezuelan gross domestic product contracted by 22.5 per cent year-on-year in the third quarter of 2018 — the most recent period for which figures were available.

GDP has fallen every quarter in Venezuela since the start of 2014, and by at least 10 per cent year-on-year in every quarter since the end of 2015, the figures showed.

The numbers are roughly in line with those of the IMF and other economists who say the economy has halved in size over the past five years, in what has become one of the biggest contractions in Latin American history.

The bank also published monthly inflation figures, which confirmed that for most of 2018 Venezuela was in the grip of hyperinflation, with monthly price rises in excess of 50 per cent.

Inflation averaged 863 per cent in 2017 and 130,060 per cent in 2018, according to the statistics.

Many independent economists have estimated the rate of price rises to be much higher. However, inflation in Venezuela is still well short of levels reached in other hyperinflation crises, such as in Zimbabwe in 2008, when prices were rising at an annual rate of 231m per cent.

The bank’s figures suggested that inflation might be easing. It said prices rose less than 35 per cent in March and April this year, the most recent data available.

These are the first GDP and inflation figures the state has published since 2015, although it has been clear to most observers that the country is in the grip of a severe economic collapse. About 3.5m people have fled the country in that time, escaping pitiful wages and shortages of food and medicine.

The Venezuelan government and opposition are holding talks in Oslo this week in a bid to find a solution to the country’s political crisis.

The power struggle between president Nicolás Maduro and opposition leader Juan Guaidó, which has dominated Venezuelan politics since the start of the year, has largely ground to a halt.

In a first round of exploratory talks this month representatives of Mr Maduro and Mr Guaidó outlined their positions to Norwegian mediators, but did not meet face to face.

In January Mr Guaidó declared himself interim president, saying Mr Maduro had usurped power on the basis of bogus elections. The 35-year-old has the backing of the US and about 50 countries but Mr Maduro retains the support of Russia, China, Cuba and a handful of other countries.

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