Venezuela’s imports have plunged 40 percent in the past year, heightening the misery of its beleaguered people, according to estimates by Bank of America Merrill Lynch.  The country, which boasts the largest oil reserves in the world, is on course for a 60 percent slump in imports over a four-year period, close to being biggest contraction seen in Latin America since comparable records began in 1970, the bank says.  The crash in imports is the latest indignity to strike a country that this week was forced to implement a two-day working week in the public sector to combat a critical shortage of power.

Venezuela is already in the midst of the world’s deepest recession. Inflation is expected to surpass 700 per cent this year and shortages mean Venezuelans often have to queue for hours for basic provisions. Polar, the country’s largest privately owned company, has stopped producing beer, citing a shortage of barley.  The data from BofA suggest the rate at which the Venezuelan economy is crumbling has accelerated this year.  “The contraction is of a much higher order of magnitude than what had been observed until 2015. It is hard to find precedents for it in contemporary Venezuelan or Latin American economic history,” says Francisco Rodriguez, an economist at BofA.  Official trade data are currently only available up to the third quarter of 2015. However, Mr. Rodriguez has pulled together more recent data from the six largest Venezuelan trading partners that publish monthly figures: Brazil, Colombia, China, Germany, Mexico and the US. He says this measure has a 90 per cent correlation with the official balance of payments data.

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