IMF: VENEZUELA’S ECONOMIC DECLINE AMONG MOST SEVERE GLOBALLY

Aruba, July 30, 2019 – The cumulative decline of the Venezuelan economy since 2013 will surpass 60% — among the deepest five-year contractions around the world over the last half century — the International Monetary Fund said Monday.

Alejandro Werner, director of the IMF’s Western Hemisphere Department, said the Venezuelan decline is historic because it is unprecedented in the hemisphere and also because it is the only one among top global five-year contractions that is unrelated to armed conflicts or natural disasters.

The IMF adjusted its 2019 forecast for the South American country to a contraction of 35% rather than the 25% decline expected back in April due to a sharp fall in the oil production, which has already plunged to its lowest level in seven decades.

Werner said the inflation forecast for 2019 has also been adjusted downward from the 10 million percent expected in April to below 1 million because of a recent increase of the legal reserve ratio imposed on local banks by the Venezuelan Central Bank.

Werner said the IMF expects the economy of Latin America and the Caribbean as a whole to grow 0.6% in 2019. But if the calculation is done for the rest of the region while excluding Venezuela, the regional average of projected growth is 1.3%.

“This reflects the big challenges the region faces in order to establish a process of sustainable growth,” Werner said in a news conference.

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