The Venezuelan economy has shrunk over the last four years, and by the end of 2017, the decline in gross domestic product has exceeded 13%. This was announced by Jose Gerra, the chairman of the Finance Committee of the National Assembly.
The Venezuelan economy shrunk by 13.2% in 2017, which is more than in 2016 when this figure was 12%. According to the economists, this is related to the reduced purchasing power of the population, which is caused by the low incomes and the sharp devaluation of the national currency. In recent years, Venezuela has experienced a severe social-economic crisis, accompanied by hyperinflation and shortage of essential necessities and medicines.
According to parliament’s estimates, where the opposition has majority, the inflation in the year 2017 has exceeded 2,600%. This year, according to some estimates, it may reach 14,000%. The difficult situation in the country forces many citizens of the Bolivarian Republic to emigrate. There are currently over 550,000 Venezuelans on the territory of neighboring Colombia.
The Venezuelan President Nicholas Maduro announced an increase in the country’s minimum wage from March 1st with 58% from 248,000 to 392,500 Bolivars (about 2 USD on market exchange rate).
In 2017, Nicholas Maduro lifted the minimum wage six times. According to estimates by the Center for Documentation and Social Analysis at the Venezuelan Teachers’ Federation the cost of the consumer basket for a 5-member family’s monthly consumption has reached 35.3 million Bolivar (about 16 USD) in February.
On the black market a dollar is exchanged for 213,000 Bolivar.
In an attempt to cope with international sanctions, Venezuela released its own cryptocurrency, with a public offering of 44 million petro on March 20 (a pre-sale was scheduled in February) and the remaining 17.6 million in the Venezuelan state would hold for itself.
Maduro hopes that the petro will allow the affected OPEC member to compensate for US sanctions, while the Bolivar currency is falling to record levels, and the country is struggling with hyperinflation and a collapsing socialist economy.