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Venezuela Continues To Struggle With High Inflation, IMF Says It Could Reach By 720 Percent In 2016

By January 23, 2016 at 9:48 pm
Venezuela Struggles With High Inflation (Photo : Mario Tama | Getty Images News)

VENEZUELA - Amidst the global economic crisis and the volatility of oil prices, Venezuela continues to struggle due to its prevailing issues as it faces high consumer inflation rate, which the International Monetary Fund (IMF) has said it could reach more than 700 percent in 2016.

While it also deals with a crushing recession, the inflation in Venezuela is apparently considered to be the highest in the world.

Alejandro Werner, IMF Western Hemisphere Director, revealed in a note posted on IMF's blog website the Latin American country could expect a 720 percent increase in inflation within this year, skyrocketing from 275 high inflation rate in 2015.

"In Venezuela, longstanding policy distortions and fiscal imbalances were already having a deleterious effect on the economy before the collapse in oil prices," Werner said. "These problems worsened as falling oil prices triggered an economic crisis, with an expected fall in output of almost 18 percent over 2015 and 2016," describing it as the world's third sharpest downfall.

Werner further said the country's weak currency has caused widespread scarcity of primary commodities such as food and uncontrollable prices of its goods in the market, "exacting a tragic toll."

In relation to this news, Venezuela President Nicolas Maduro requested for emergency powers to give him an expanded authority to rule for 60 days while the nation is in the middle of an economic crisis, according to the report of the Associated Press.

However, members of the opposition party did not adhere to his request, arguing that the president is responsible for Venezuela's high inflation and shortages of commodities They even promised to remove Maduro from his position within six months.

"We're not looking to double down on the same policies that got us into this crisis," said majority leader Julio Borges. "What we need is real change."

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