Venezuela Crisis

In Venezuela, the GDP and inflation outlooks continue to deteriorate significantly as the economic crisis deepens. Price controls and the prohibition of private profits, along with a lack of investment in basic infrastructure, have destroyed Venezuela’s productive capacity. Consequently, the country must import almost everything it consumes. However, foreign currency controls have hindered the ability to pay for those imports, while the collapse in the price of oil (Venezuela’s only major export) has worsened the shortage in badly-needed US dollars. With basic goods like food and medicine no longer in circulation (or sold on the black market at exorbitant prices), inflation has soared to almost 400%. President Maduro declared another 60-day state of emergency on May 13 but, despite threatening to seize closed factories, people continue to go hungry, and civil and criminal unrest is rampant. The opposition has called for a referendum on Mr. Maduro’s leadership.

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