Financial Crisis in Venezuela Continuing depreciation of BoliviaCONTENTS Venezuela, the largest oil-producing country in South America Venezuela’s Hyperinflation The factor of financial crisis Venezuela’s outlook The implications of this financial crisis0. A Venezuelan woman posted a photo on SNS 5.2 million Bolivar, average monthly wage 5.1 million Bolivar1. The largest oil-producing country1. The largest oil-producing country1. The largest oil-producing country1. The largest oil-producing country The richest country in South America Why did this happen?2. Venezuela’s Hyperinflation The richest country in South America Hyperinflation In Venezuela2012 – 20% 2013 – 50% 2017 – 2,000% 2018 – 1,700,000% 2019 – 10,000,000%? Depreciation of Bolivar 2. Venezuela’s Hyperinflation2. Venezuela’s Hyperinflation EX. The price of a cup of coffee The beginning of this year 5000 won Now 300,000 won The end of the year 500,000,000 ? won2. Venezuela’s HyperinflationFall in international crude oil prices 3. The factor of financial crisis High Oil Dependency - 96% of exports - over 60% of the government revenuesThe US found new energy resource, Shale Gas ! - Fall in international crude oil prices 3. The factor of financial crisis- Fall in international crude oil prices 3. The factor of financial crisis- Fall in international crude oil prices 3. The factor of financial crisis- Fall in international crude oil prices 3. The factor of financial crisisE xcessive economic policy 3. The factor of financial crisis Nationalization of the main industry Various price controls Fixed exchange rate system R egulation-oriented economic policy Close associates of the regime with little experience in the industry were appointed to nationalized enterprises . Management failure Distortion of the market Reduction of economic vitalityNicolas Maduro’s populist policy Excessive free welfare Free education, free medical care, housing support 30% increase in minimum wage and retirement pensions each before Christmas season Christmas bonus payment Dolls to All Kids 6 kg of pork for all households - E xcessive economic policy 3. The factor of financial crisis- E xcessive economic policy 3. The factor of financial crisis issue much more money!- E xcessive economic policy 3. The factor of financial crisis- E xcessive economic policy 3. The factor of financial crisis A village uses its own currency as a local voucher The unit of the new currency, Bolivar Soberano 100,000 Bolivar Soberano = 1 Bolivar- P olitical conflict 3. The factor of financial crisis4. Venezuela’s outlook conflicting views in the region The government will try to ease foreign exchange controls. Inflation will worsen the economy Prices will be normalized4. The implications of this financial crisis to Korea High dependency on the semiconductor industry The market turbulence caused by the government`s regulation-oriented economic policies Policy that creates conditions for companies to be active and create jobs rather than regulationsTHANK YOU FOR LISTENING{nameOfApplication=Show}