Nicolás Maduro considered hyperinflation over in Venezuela

The Venezuelan president, Nicholas Maduro, announced the country’s exit from hyperinflation after four years and assured that the national economy grew 4% in 2021 after seven years of recession.

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In his accountability before Parliament, Maduro presented “2022 as the year of the emergence” of the country, in the midst of the greatest economic crisis in its modern history.

What was the annual inflation rate for 2021 in Venezuela

Inflation for 2021 stood at 686%, according to the Central Bank of Venezuela (BCV), with monthly records below 50%, the traditional threshold established for a country to overcome hyperinflation.

“This makes us optimistic that we have overcome the burdens of hyperinflation and in power, with a lot of discipline, work, effort, with great intelligence, audacity and wisdom, in 2022 we will embark on a path to flatten and defeat high inflation”, Maduro said.

A man shows a bundle of bills in Venezuela (Photo: EFE)

The president also assured that 2021 was the first year of recovery and “growth” of the country, which until 2020 added seven years in recession after the death of Hugo Chavez.

The Central Bank of Venezuela has not published GDP data since the first quarter of 2019, but the International Monetary Fund (IMF) estimated that in 2020, in the midst of a pandemic, suffered a collapse of -20%. The agency said that 2021 had a drop of -5% and calculated that this year will also end in the red with a collapse of -3%. The Ecoanalítica consultancy calculates that the Venezuelan economy collapsed 80% between 2013 and 2020.

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Nicolás Maduro said that the GDP grew more than 4% in 2021 in Venezuela

In his speech, Maduro pointed out that “annual growth (in) 2021 of more than 4% is projected” and assured without giving more details that the “real economy” grew 7% in the third quarter of last year.

Ecoanalítca projected economic growth of 3% by 2021.

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Maduro denounced in recent years that his country is experiencing an “economic war” due to the “blockade” of the United States. Washington applied a series of sanctions against Caracas that includes an oil embargo.

In this framework, the Venezuelan president said that during 2021 Venezuela achieved “an important milestone by reaching a (oil) production of one million barrels per day” (bd) and remarked that the goal for this year is 2 million. This is a figure that is still below the 3.2 reached by the industry more than 10 years ago.

Nicolás Maduro and the progress of the Venezuelan economy
Nicolás Maduro and the progress of the Venezuelan economy

The president promised a year ago to bring the production of the former oil power to 1.5 million b/d, which fell in July 2020 to less than 400,000 bd, at levels of the 1930s and 1940s.

Maduro defends a “diversified economy” that does not depend on hydrocarbons and opted to build the state-owned Petróleos de Venezuela (PDVSA), plagued, according to experts, by corruption, erratic decisions, lack of maintenance and US sanctions.