International

Maduro unveils reforms to revive crisis-hit economy

Venezuela’s President Nicolas Maduro announced on Friday a single exchange rate pegged to his government’s petro cryptocurrency, effectively devaluing by 96% in a move economists said would fan hyperinflation in the chaotic country.

In one of the biggest economic overhauls of Mr. Maduro’s five-year government, the former bus driver and union leader also said he would hike the minimum wage by over 3,000%, boost the corporate tax rate, and increase highly-subsidised gas prices in coming weeks.

“I want the country to recover and I have the formula. Trust me,” Mr. Maduro said in a night-time speech broadcast on state television.

Scepticism expressed

But economists expressed doubts that Venezuela’s cash-strapped government, which faces U.S. sanctions and has defaulted on its bondholders, would succeed. Venezuelans will see their meagre salaries further eroded and companies will struggle with major increases to both taxes and the minimum wage, they said.

“Amid this aggressive devaluation and monetary expansions due to salaries and bonuses, we are expecting a much more aggressive stage of hyperinflation. All the more so in a context where the elimination of excessive money printing is not credible. The worst of all worlds,” said Venezuelan economist Asdrubal Oliveros of consultancy Ecoanalitica.

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Printable version | Apr 6, 2020 6:33:11 PM | https://www.thehindu.com/news/international/maduro-unveils-reforms-to-revive-crisis-hit-economy/article24726839.ece

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