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Venezuela entered recession with inflation at 63 percent

Venezuela entered recession with economic growth shrinking for the first three quarters of 2014.

Dec 31, 2014 16:31 IST
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Venezuela on 30 December 2014 entered recession with economic growth shrinking in the first three quarters of 2014. It was announced by the Central bank of Venezuela.

The economy of Venezuela shrank 2.3 percent in the third quarter after shrinking 4.8 percent in the first quarter and 4.9 percent in the second quarter.

Besides, the inflation of Venezuela has reached 63 percent in the month-ending November 2014 which is the highest inflation in the world. Price increases were the sharpest especially for housing, food and alcoholic beverages, and restaurants and hotels.

Though Venezuela government has introduced mandatory price cuts to control inflation but has not managed to get the inflationary spiral under control. Inflation has been aggravated by severe shortages of basic goods and fall down of crude prices.

Balance of payments of Venezuela is in surplus of 6.8 billion US dollars by the end of the third quarter in 2014, with a current account surplus of 899 million US dollars, and the capital account showing a deficit of 568 million US dollars.

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