Venezuela’s President to Declare Economic Emergency
Venezuela has sustained from the economic emergency. Official data showed that last year the Venezuela's economy shrank 4.5 percent in the first nine months and inflation has reached 141.5 percent. This situation has made Venezuelan president take some action
According to The Guardian, the Venezuelan economy is highly dependent on oil. 95 percent of foreign currency come from oil. With oil prices now below 30 dollars per barrel, Venezuela's income decreased by 62 percent.
To overcome this crisis, Venezuelan President Nicholas Maduro get support from the National Assembly where he gave his state of the nation address. It would grant Maduro extraordinary powers for two months to rule on economic matters.
In his address, Maduro called for national unity to confront the economic crisis. He said that concrete solution has to be taken to save the country. Venezuela suffered a crippling institutional crisis earlier this week. The opposition still maintains control of parliament despite the loss of two-thirds majority.
Nevertheless, Assembly President Henry Ramos Allup from the opposition Democratic Action Party said the parliament would study the decree next week and put it for debate because extraordinary powers to make Maduro intervene in companies or limit access to the currency. It also provides special temporary authority to increase production and ensure access to primary goods.
According to the Chicago Tribune, Venezuela is one of the countries with the worst performance in 2016 of 93 countries surveyed. By 2016, the oil-rich country will contract by 3.3 percent. After Venezuela, followed by Brazil, Greece and Russia. It is the median estimate of a recent survey from each country was conducted between October and December 2015.
CNN noted that oil crashed hurt Venezuela the most. It is because the country depends on oil. The slump of oil price below $ 30 makes Venezuela struggle to grow. Venezuela's export will total a mere $27 billion in 2016, down dramatically from $75 billion two years before, as said Barclay economist Alejandro Arreaza.
The Bolivar, Venezuela currency also has plunged deeply. A year ago, a dollar equaled 175 bolivars but now is worth 865 bolivars. It because Maduro set three official exchange rate - two for different import and one for ordinary Venezuelans. The two primary rates deeply over value the bolivar, creating high demand for the dollar.
Edward Glossop, an economy analyst at Capital Economics told the CNN that Venezuela is in the economic meltdown. The figures are horrific and predictable. Some experts believe even that figure is understating the problem. The IMF project inflation will reach 204 percent this year.