Venezuela 2010: Stagnation with hyperinflation

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

The IMF, the local schools of economy and the Venezuelan independent business chambers agree: Venezuela's economic expectation for 2010 is a scenario of stagnation.

The IMF expects growth of -0.4% for the GDP of Venezuela, despite the major economies are already in the recovery phase after the alarming 2008-2009 financial crisis. It is envisaged that Latin America as a whole will increase the size of its economy by 4% on average; being Chile, Colombia and Brazil the countries with the highest expectations (5% growth in GDP) and Venezuela the worst in the region.

However, according to forecasts of these institutions, not everything will stagnate economically in Chavez's country. Thus, although private consumption and investment will remain weak in 2010, due to faulty government economic policies, inflation is expected to continue its dizzying upward trend, comfortably surpassing the mark of 40%.

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