Hi Friends....
Here is a very shocking incident of Venezuela i.e. hyperinflation. We have to took into the matter and concern about this.
The South American country is spiraling further into a humanitarian disaster imbued by the government's economic policies, which have caused inflation to skyrocket 83,000 percent in the past 12 months, according to a recent study by the opposition-controlled National Assembly .
Venezuelan parliament issued fresh economic data , showing that inflation for the month of July spiked 110.1 percent compared with June, and sending annual inflation to 24,571 percent in the financial year. Daily inflation running at 2.4 percent, the country's currency, the bolivar, plunged about 98 percent in the course of the past 12 months alone. This is really matter of huge volatility of economy .
Prices have been doubling every 26 days on average. This has resulted in many Venezuelans struggling to afford even basic items such as food and toiletries. Small items like a cup of coffee costing a whopping 2.5m bolivars until recently, it also became increasingly difficult to pay for goods in cash.
Photo courtsy: BBC
How did hyperinflation come about?
On the most basic level, there are more people wanting to purchase goods than the number of goods available in the country. Venezuela is rich in oil, and has the largest proven reserves in the world. But arguably it's this exact wealth that increases many of its economic problems.
Venezuela has never bothered to produce much else because it has so much oil. It sells oil to other countries, and with the dollars it earns, imports the goods Venezuelans want and need from abroad.
Its oil revenues account for about 95% of its export earnings. But when the oil price plummeted in 2014, Venezuela was faced with a shortfall of foreign currency. As a matter of fact people are migrating nearest countries to live due to hyperinflation of the country.
This in turn made it difficult to import goods at the same level as before, and imported items became scarcer.
The present situation is that the government of the country is trying to settle down the matter. Many method have been applied but there is no satisfactory result. They are consulting with IMF and World Bank to short out the problem.
Our Concern:
The Honchos of every Economy around the Globe should be concerned about the matter and they should guide their economic system properly. After all, We have to learn from other's faults also.
Please keep supporting me by giving your upvotes and resteem. Please place your valuable opinions and suggestions by commenting in the comment section below.