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Venezuela on track to world's highest inflation

Venezuela Panecillo
LatAm   Venezuela money supply up 200 percent in year

Venezuela's money supply has surged over 200 percent in a year, its fastest rise since records began in 1940.


This is putting it on track for what is likely the world's highest inflation.

Soon after a month-long hiatus from publication, the central bank said late on Friday the total amount of local currency in circulation - known as M2 by economists - as of March 24 was 13.3 trillion bolivars, up 202.9 percent from a year earlier.

In contrast, the United States' money supply was up 6.4 percent in the same period.

Venezuela is in a major economic crisis, with millions struggling with food shortages and inflation thought to be in triple digits - though no official data is available.

The exponential rise in M2, the sum of cash, together with checking, savings and other deposits, means an exponential rise in the amount of currency circulating.

Coupled with a decline in the output of goods and services, that has accelerated inflation.

 

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