“The International Monetary Fund has predicted that inflation in Venezuela will hit 720% this year. That might be an optimistic assessment, according to some local economic analysts, who expect the rate to reach as high as 1,200%.
A sharp drop in global prices for oil — on which Venezuela depends for most of its foreign currency — is a big part of the problem. Critics also accuse the government of irresponsible spending on social welfare programs and oil subsidies to Cuba and other countries.
To understand what that kind of inflation means, we spoke to Maria Linares, a 42-year-old single mother who works as an accounting assistant at a government ministry and lives in an impoverished neighborhood of the capital, Caracas.
Her monthly pay, including a food allowance, is 27,000 bolivars.
That’s $2,700 a month at the official exchange rate of 10 bolivars to the dollar. But Venezuelans have so little faith in their currency — or the government’s ability to fix the country’s deepening economic crisis — that a dollar can fetch upward of 1,000 bolivars on the black market. At that rate, Linares earns just $27 a month.
Either way, it’s not enough.”
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