Venezuelans already struggling to find food, medicine and other basic necessities. Photo / AP
Venezuelans already struggling to find food, medicine and other basic necessities. Photo / AP
The International Monetary Fund has severe concerns for struggling Venezuela.
The International Monetary Fund has expressed grave concerns over Venezuela's unending political crisis, warning it sees "no end" to the economic downturn and suffering of the population, said news.com.au.
Venezuela "remains in a full-blown economic, humanitarian, and politicalcrisis with no end in sight," the Fund said in a report on Latin American economies.
By the end of this year, the country's economy will have contracted a whopping 35 per cent from 2014, and the Fund says the country is headed toward hyperinflation, when prices soar uncontrollably every day for a long period.
The Venezuelan government released new, higher denomination bills in values of 500, 5000 and 20,000 bolivars earlier this year after the currency meltdown left the country's then-largest note worth around 2 US cents (less than 3 Australian cents) on the black market.
But now even the freshly minted bills, printed in rainbow hues and imported in part from the US, are quickly dwindling in value.
In January, one US dollar was worth 4578 bolivars on Venezuela's pervasive black market; by October a US dollar got you 29,170 bolivars, according to DolarToday, a website critical of the government that tracks the black market rate.
The bolivar is worth so little that instead of cash, some businesses have begun accepting a new form of payment: bartering goods. Roberto Granadillo, a local watchmaker said he accepts a kilo of ham, chicken or beef in exchange for a newly ticking watch.
Venezuelans already struggling to find food, medicine and other basic necessities. Photo / AP
To compound the blow, dozens of airlines have also stopped flying in and out of the troubled South American nation - formerly South America's wealthiest - due to concerns over violence and political uncertainty. It's a move which could wipe it off the travel map for good.
Argentine Airlines was the latest airline to announce it was suspending flights to the capital Caracas, citing "operational reasons".
It followed similar moves by US airlines United and Delta, Germany's Lufthansa, Air Canada, Aeromexico, Alitalia and Colombian airline Avianca, among a drove of other carriers.
That leaves only a small handful of airlines still flying people in and out of Venezuela, providing the country's last, tenuous links to the rest of the world.
But even those airlines are showing signs of worry. While Panama carrier Copa Airlines denied it would abandon its Venezuelan route, it said it still wouldn't let its crew stay overnight in Venezuelan cities, AFP reported.
The International Air Transport Association (IATA) said Venezuela was becoming increasingly isolated.
"Venezuela is becoming disconnected. It's practically disconnected from the rest of the world, above all by air, and we can't see any solution in the short term," the association's vice president Peter Cerda said.
The International Monetary Fund said the economic and political strife is taking a huge toll on the Venezuelan people, who are trying to flee the troubled country.
"The main risk to the region relates to the humanitarian crisis and ensuing migration of Venezuelans to neighbouring countries," it said.
"The number of Venezuelans arriving in Brazilian and Colombian border towns has been rising sharply as the crisis in Venezuela intensifies."
Robert Rennhack, deputy director of the IMF's Western Hemisphere Department, described this ensuring refugee crisis as "extremely severe" for the region. The refugees, he said, are putting pressure on the social services of neighbouring countries.
"The (Colombian) government is managing it as well as it can, but it's a challenge. If, say half a million to a million of Venezuelans enter Colombia, that's something the government has to deal with and it's causing much problems."
