What caused the Venezuelan economic crisis of 2016

    What caused the Venezuelan economic crisis of 2016

  • 1 Sharp drop in oil prices

    Venezuela's economy depends on oil as it's one of the largest oil producers in the world. As the oil prices fell greatly, the economy started to suffer. 95% of Venezuela's exports are oil exports.

  • 2 Printing money

    To be able to pay the expenses, the Venezuelan government started printing money; thus leading to a high inflation and a collapse in the price of the local currency.

  • 3 The government's actions

    Many people believe that the Venezuelan government failed to contain the crisis through their actions and that things could have been much better if the government had acted properly.

  • 4 The adoption of socialism

    Some analysts believe that the adoption of the socialist system was one of the reasons the productive sectors of the country became weaker.

  • 5 Water & electricity shortage

    Venezuela’s dependence on water as its primary electricity source led to a crisis, as the country faced a 3 year drought caused by climate change. The water shortage led to an electricity shortage.

  • 6 Increased violence

    The crisis led to protests, riots, criminal activities and general events of violent. The violence put more pressure on the economy.

  • 7 Extremely high inflation

    Inflation went extremely high in the country, increasing by a few hundred percentage points in the past few years.

  • 8 Food shortage

    The crisis led to a food shortage problem where many citizens struggled to get the basic food necessities. The strict rules imposed on importing foreign goods were responsible for a part of the food crisis. 

  • 9 Governmental corruption

    Some analysts believe that the corruption coming from the government affects the production of goods in the countries. Those analysts believe that private companies would have done a better job if the country hand't adopted the socialist system.