Venezuela eyes new ways of curbing runaway inflation

Venezuela's government is preparing to take new measures to attenuate the nation's runaway inflation in a strategy to combat what it calls "speculative practices," according to economy and finance minister Ramón Lobos.

In a recent interview with state news service AVN, Lobos said the government "is evaluating a new mechanism for the system of prices and a re-engineering of the [country's socioeconomic rights watchdog] Sundde, as actions to reduce the inflation rates."

According to the IMF's most recent forecast, Venezuela is set to see 1,660% inflation in 2017, up from its estimate of 479% inflation in 2016, as the economy continues to be plagued by low oil prices and a crippled currency.

Lobos posited in comments that 70% of the rise in prices on basic goods and supplies were tied to speculation. The political opposition and many international observers on the other hand say years of macroeconomic mismanagement by the left-wing government has caused runaway inflation and other severe economic problems.

"Venezuela remains in a deep economic crisis on a path to hyperinflation, led by a large fiscal deficit that has been monetized, extensive economic distortions, and a severe restriction on the availability of imports of intermediate goods," Alejandro Werner, the IMF's director of the Western Hemisphere Department, said last month.

The government's new measures are aimed at restarting 15 economic motors, according to the official, allowing for greater supply of goods and services, "to counter practices of hoarding and price-gouging, typical of the non-conventional war perpetrated by political and business interests on the right."

Lobos also hailed the expansion of Venezuela's local provision and production committees CLAP.

'The 6mn homes aided by the CLAP will help to improve the availability of goods and food," said Lobos. "The CLAP has also been a response to the monopoly in distribution."

Lobos also called on the public to help stem speculative practices and assist in the work of the CLAP moving forward.

Venezuela has hit roadblocks in recent efforts to resolve ongoing political conflicts and develop much-needed economic solutions. According to the IMF, the country's GDP contracted 12% last year and is set to contract 6% this year.

The country recently replaced the central bank chief in a sign Venezuelan President Nicolás Maduro (pictured) is not planning any shift in its monetary policy. In 2005 then-president Higo Chavez stripped the central bank of its autonomy, giving the government control of international reserves.