Hyperinflation in Venezuela

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Hyperinflation in Venezuela

Part of the crisis in Venezuela
Venezuelan migrants in Bogotá selling crafts made of worthless Venezuelan banknotes in November 2019
Date	2016–early 2022
Location	Venezuela
Cause	Government policies, price controls, corruption, currency devaluations, heavy money-printing, and deficit government spending
Outcome	Large decline in real wages despite continuous nominal wage increases,[1] unemployment, rising prices in goods, redenomination of the Venezuelan bolívar fuerte to the bolívar soberano and then again to the bolívar digital, dollarization,[2] decrease of tax revenues and shortages of foreign currency reserves and goods

Hyperinflation in Venezuela is the currency instability in Venezuela that began in 2016 during the country's ongoing socioeconomic and political crisis.^[3] Venezuela began experiencing continuous and uninterrupted inflation in 1983, with double-digit annual inflation rates. Inflation rates became the highest in the world by 2014 under Nicolás Maduro, and continued to increase in the following years, with inflation exceeding 1,000,000% by 2018. In comparison to previous hyperinflationary episodes, the ongoing hyperinflation crisis is more severe than those of Argentina, Bolivia, Brazil, Nicaragua, and Peru in the 1980s and 1990s, and that of Zimbabwe in the late-2000s.

In 2014, the annual inflation rate reached 69%,^[4] the highest in the world.^[5][6] In 2015, the inflation rate was 181%, again the highest in the world and the highest in the country's history at the time.^[7][8] The rate reached 800% in 2016,^[9] over 4,000% in 2017,^{[10][11][12][13]} and about 1,700,000% in 2018,^[14] and reaching 2,000,000%, with Venezuela spiraling into hyperinflation.^[15] While the Venezuelan government "had essentially stopped" producing official inflation estimates as of early 2018, inflation economist Steve Hanke estimated the rate at that time to be 5,220%.^[16] The Central Bank of Venezuela (BCV) officially estimates that the inflation rate increased to 53,798,500% between 2016 and April 2019.^[17] In April 2019, the International Monetary Fund estimated that inflation would reach 10,000,000% by the end of 2019.^[18] Several economic controls were lifted by Maduro administration in 2019, which helped to partially tame inflation until May 2020.^[19]

In December 2021, economists and the Central Bank of Venezuela announced that in the first quarter of 2022, Venezuela would reach more than 12 months with monthly inflation below 50% after more than four years of a hyperinflationary cycle. This would technically indicate its exit from hyperinflation, but the consequences would remain.^[20][21]

Crisis in Venezuela
Causes Bolivarian Revolution Chavismo Economic policy under Hugo Chávez Economic policy under Nicolás Maduro
Effects Refugee crisis Blackouts Energy crisis Defections International sanctions Interventions of political parties Piracy Shortages Venezuela–Colombia migrant crisis Hyperinflation Catatumbo campaign Xenophobic incidents Pemon conflict
Events Dakazo La Salida Arrest of Antonio Ledezma 2016 recall movement 2017 Venezuelan constitutional crisis Lima Group 2018 re-election campaign of Nicolás Maduro Venezuelan presidential crisis 2019 shipping of humanitarian aid to Venezuela Venezuela Aid Live COVID-19 pandemic 2022 recall movement 2023 Unitary Platform presidential primaries
Elections 2013 presidential election 2015 parliamentary election 2017 referendum 2017 Constituent Assembly election 2018 presidential election 2020 parliamentary election 2023 referendum
Protests 2013 2014 2015 2016 2017 2018 2019
Timeline 2014 2015 2016 2017 2018 2019
Armed violence Caracas helicopter incident 2017 National Assembly attack Attack on Fort Paramacay El Junquito raid Caracas drone attack 2019 uprising attempt 2020 Barquisimeto shooting Operation Gideon (2020) 2021 Apure clashes 2022 Arauca clashes
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