Economy 10-10-2018

Constituent: IMF projection on inflation in Venezuela is fanciful

The latest projections of the International Monetary Fund (IMF) on hyperinflation of 10,000,000% in Venezuela for 2019 were described as fantasies by the constituent David Paravisini, who, in an interview with Sputnik, highlighted that they are published in the middle of a "ferocious" campaign against his country.

"They are speculations and that is what the International Monetary Fund has got us used to and above all when there is a fierce campaign against Venezuela, because they draw some accounts based on their own estimates, fanciful predictions," said Paravisini.

In its new global economic outlook report, the IMF indicated that Venezuela will have inflation of 10,000,000% in 2019 with a reduction of 5% in gross domestic product, while this year it projects a fall of 18%.

For the assemblyman, the figure presented by the IMF does not take into account the Economic Recovery Plan launched on August 20 by President Nicolás Maduro.

"Let's say that at this moment what we can see is that economic analyzes are being done with photographs of this whole economic plan that President Nicolás Maduro has that has not yet been put into effect," he said.

Paravisini said that one of the government's strategies to combat hyperinflation is the use of the petro cryptocurrency, which he explained would be a liberation from the exchange control that exists in the country since 2003.

According to what Maduro announced, a petroleum will be equivalent to a barrel of oil and anchored to other hydrocarbons to avoid abnormal fluctuations.

However, to maintain its value once it enters the market, this cryptocurrency needs the confidence of the markets to function as a means of exchange, payment and savings.

Regarding this confidence, Paravisini indicated that it will be based on the exchange with allied countries and maintained that it received a first approval recently from the Government of Turkey, a country that affirmed that it was willing to receive the petro as a form of payment.

"We have seen statements by the Turkish Foreign Minister (Mevlüt Çavuşoğlu) in which he says that Turkey accepts the petro as a form of payment, that is, that government is accepting to be guarantor of financial associations," he said.

But he said that it is still necessary for other governments such as Russia and China to join the initiative of the Venezuelan digital currency backed by the value of crude and other metals such as aluminum and iron.

The petro was launched a week ago to the international market, but it is not yet on sale in the authorized exchange bureaus for that purpose.

However, it has been one of the main flags of Maduro's recovery plan, which even anchored the Venezuelan currency to this cryptoactive.

Another of the main goals of the state project to recover Venezuela from the economic crisis is to increase crude production to at least 2 million barrels per day.

In recent years, the crude production of the Caribbean country has remained in a tailspin, according to the latest OPEC report, and in September it reached 1,200,000 barrels per day.

The reduction in production has had a negative impact on the economy, in which 95% of its income depends on this hydrocarbon.

Therefore, the economist believes that this projection is "unreal" because it can not predict the outcome of the government's recovery plan.


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