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Customers hold their shopping bags of newly bought corn flour and toilet paper as they line up outside a private supermarket in Caracas, Venezuela, Jan. 16, 2015.
Fernando Llano/AP
Finance & Innovation

Venezuela's Prices Could Skyrocket 1,000,000% Amid Humanitarian Crisis


Why Global Citizens Should Care
Hyperinflation and lack of physical cash has resulted in many Venezuelans without access to basic food and medical needs. You can join us in taking action on this issue and more here.

Venezuela’s economic crisis will see a 1 million-percent inflation by the end of 2018, reports Agence France-Presse (AFP).

The International Monetary Fund (IMF) shared the warning in its updated regional outlook for Latin America on Monday.

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"We are projecting a surge in inflation to 1,000,000 percent by end-2018 to signal that the situation in Venezuela is similar to that in Germany in 1923 or Zimbabwe in the late 2000s," said Alejandro Werner, head of the IMF's Western Hemisphere Department, in a statement.

The nation's financial collapse will increasingly spill over into neighboring countries, noted the report, and marks the third consecutive year of double-digit declines at three points worse than projected in May, amid falling oil production, according to IMF.

Venezuela has been caught in a spiraling economic collapse ever since crude prices tanked nearly four years ago and officials have neglected to enact economic adjustments.

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“The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post, reports Bloomberg.

Despite hundreds of thousands of Venezuelans suffering from hunger and price surges, President Nicolas Maduro continues to maintain that the crisis is a result of an “economic war” waged by his political opponents at home and abroad, noted Bloomberg.

"We expect the government to continue to run wide fiscal deficits financed entirely by an expansion in base money, which will continue to fuel an acceleration of inflation as money demand continues to collapse," added Werner in the statement.