[LINK] "Venezuela Economy Head Calls for Creativity as Oil Hits Low"

[rfmcdonald]

The scale of the economic collapse of Venezuela, as described here by Blkoomberg's Nathan Crooks, is eye-catching. One wonders what will happen next.

Venezuela’s new economy minister, who has argued that inflation doesn’t exist “in real life,” said policies to be announced on Jan. 12 would seek to avoid sacrifices by ordinary people as the price the South American country receives for oil exports plunges to a 12-year low.

“Our goal is to see how we can respond to these external restrictions without making internal sacrifices,” Luis Salas, who President Nicolas Maduro put in control of the economy this week, said Friday in an interview on the Telesur network. “That’s going to take creativity.”

The falling price of oil, which accounts for 95 percent of exports, has exacerbated shortages of everything from medicine to soap and placed the economy as the number one issue on voters’ minds as they handed Congress to the opposition for the first time in 16 years last month. No single measure can solve the economic problems, said Salas, who went on to signal that he opposes raising subsidized prices for household goods in order to boost supply.

“We’re not doing anything to make products available if the people can’t afford them,” Salas said.

He downplayed a recession that saw the economy contract 10 percent last year, according to the International Monetary Fund. Inflation in Venezuela, already the fastest in the world, will increase to 204 percent this year, the IMF also estimates. The central bank hasn’t published any official data since the end of 2014.