RE: Inflation was almost 30% when he left...so what caused it?

Posted on: February 10, 2022 at 11:22:54 CT

A monetarist view[45] is that a general increase in the prices of things is less a commentary on the worth of those things than on the worth of the money. This has objective and subjective components:

Objectively, that the money has no firm basis to give it a value.
Subjectively, that the people holding the money lack confidence in its ability to retain its value.
According to experts, Venezuela's economy began to experience hyperinflation during the first year of Nicolás Maduro's presidency.[46][47] Potential causes of the hyperinflation include heavy money-printing and deficit spending.[48] In April 2013, the month Maduro took office, the annual inflation rate was 29.4%, only 0.1% less than the rate in 1999 when Hugo Chávez took office.[49][50] By April 2014, the annual inflation rate was 61.5%.[51] In early 2014, the BCV did not release statistics for the first time in its history, with Forbes reporting that it was a possible way to manipulate the image of economy.[52] In April 2014, the IMF stated that economic activity in Venezuela was uncertain but may continue to slow, and that "loose macroeconomic policies have generated high inflation and a drain on official foreign exchange reserves". The IMF suggested that "more significant policy changes are needed to stave off a disorderly adjustment".[53] According to economist Steve Hanke, Venezuela's current economy, as of March 2014, had an inflation rate hovering above 300%, an official inflation rate around 60%, and a product scarcity index rising above 25% of goods.[54] The Venezuelan government did not report inflation data for September and October 2014.[55]

The growth in the BCV's money supply accelerated during the beginning of Maduro's presidency, which increased price inflation in the country.[56] The money supply of the bolívar fuerte in Venezuela increased 64% in 2014, three times faster than any other economy observed by Bloomberg News at the time.[57] Due to the rapidly decreasing value of the bolívar fuerte, Venezuelans jokingly called it "bolívar muerto" ("dead bolívar").[58]

Maduro has blamed capitalist speculation for driving high inflation rates and creating widespread shortages of basic necessities. He has said he is fighting an "economic war", referring to newly enacted economic measures as "economic offensives" against political opponents, who, according to Maduro and his loyalists, are behind an international economic conspiracy.[59] Maduro has been criticized for concentrating on public opinion instead of tending to practical issues that have been warned by economists, or creating solutions to improve Venezuela's economic prospects.[60]