Venezuela – 700% inflation

A very good clip from CNBC – Venezuela’s economy has been in free fall since the 2014 collapse of oil prices, which left the socialist country unable to maintain its subsidies and price controls. Oil revenue accounts for 95% of its total exports but with a 50% drop in the price of oil there was limited money in the economy to buy those necessary imports. However as pointed out in the video the problems started in 2003 when there was an oil workers strike which meant that the country stopped producing oil. Furthermore with a collapsing oil price and exchange rate against the US dollar the then president Hugo Chavez decided to fix the exchange rate at 1 Venezuelan bolívar = US$1.60. Another example of the resource course.

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