Some readers may recall this headline from January 2018 "IMF Projects Venezuela Inflation Will Soar to 13,000 Percent in 2018."
This, it turns out was just a little bit off, because as we reported only two weeks ago, Venezuela's annualized inflation hit an annualized rate of 482,153%, with food prices soaring 183% in just one month.
Fast forward to today, when it's time for another "slight revision" because according to the latest IMF forecast released today, Venezuela’s hyperinflation by the end of the year will hit, drumroll, 1,000,000% as the government continues to simply print money to in hopes of filling the void of what was once the country's economy. Putting that number in perspective, the IMF believes that Venezuela inflation hit only 2,400% in 2017, according to a report published Thursday by Alejandro Werner, head of the IMF’s Western Hemisphere department.
The revised forecast means that as of right now, Venezuela's hyperinflation has officially surpassed the Weimar Republic's, where the highest recorded monthly inflation was a timid 29,500% (resulting in prices doubling ever 3.7 days).
In addition to record-breaking hyperinflation, the IMF also expects the Venezuelan economy to contract 15% this year, leading to a cumulative GDP decline since 2013 of 50%.
Venezuela's collapse, while contained, is so profound it is now holding back the rebound of the entire region: while Latin America is expected to grow 1.9% this year, the number would be 2.5% without Venezuela according to Bloomberg.
The good news is that the strong US economic growth, largely the result of a fiscal stimulus sugar high, is providing a solid backdrop to the rest of the continent: "Recent trends in the world economy and financial markets are good news for Latin America,” Werner wrote. “Global growth and trade are on an upswing, and we expect the momentum to continue in 2018. Stronger commodity prices have also helped the region rebound."
The IMF spared any commentary or warning that Venezuela should serve as a cautionary tale to any government that refuses to live within its means.