I thought that Venezuela’s economic crisis was so acute — with a 12 percent economic contraction in 2017, a 700 percent inflation rate and widespread shortages of food and medicines — that it could hardly get worse. But new data show that it’s going to get a lot worse in 2018.
Venezuela has entered a new phase in its gradual economic decline since late President Hugo Chavez started his “Bolivarian revolution” in 1999. While the country had the world’s highest inflation rates in recent years, it had not technically reached the stage of hyperinflation, when prices go up by more than 50 percent a month.
But now Venezuela has crossed that threshold in recent weeks, according to leading economists with whom I talked recently. When countries reach hyperinflation, money becomes meaningless, because nobody knows what the price of goods and services is, and the economy is thrown into total chaos and paralysis.
