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Venezuela president declares economic emergency as inflation hits 141%

Venezuelan president Nicolás Maduro has declared an economic emergency, seeking broad powers to address a crippling recession in the oil-dependent country after official figures showed that inflation has spiralled to 141%.

The vaguely worded decree would grant Maduro extraordinary powers for two months to rule on economic matters but must be approved by the National Assembly, now under control of the opposition, where he gave his state of the nation address late Friday.

In a rambling three-hour speech which swung from conciliatory to defiant, Maduro at one point dared the opposition to privatise public housing, saying they would have to topple him first, and later called for “national unity” to face the economic crisis.

“We have to recognize our mistakes which are many,” Maduro said. “The Venezuelan people are waiting for concrete solutions.”

However, beyond mentioning the need to raise the price of heavily subsidised petrol, and to reform the tax regime, Maduro did not lay out specific plans to lift the country from the crisis, maintaining the narrative that the Venezuela’s economic woes were the result of falling oil prices and an “economic war” .

“There is a non conventional war that attacks out homeland,” said the beleaguered president, who succeeded the wildly popular Hugo Chávez who setVenezuela on a socialist path as part of his self-styled “Bolivarian revolution”.

The central bank, which had not published economic statistics since the end of 2014, said on Friday that Venezuela’s economy shrank 4.5% in the first nine months last year and that inflation hit 141.5 percent. Maduro called the figures “catastrophic”.

Venezuela, which depends on oil for 95% of its foreign currency, saw its income drop more than 62% due to the sharp downturn in oil prices, Maduro said. The oil price settled at below $30 a barrel for the first time in 12 years on Friday.

All that has led to shortages of basic goods and a slump in the purchasing power of most Venezuelans.

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Maduro’s address was exceptional in that for the first time in 17 years, the mostly centre-right opposition controls the assembly after winning in the December elections.

Venezuela stepped back from a potentially crippling institutional crisis earlier this week when the opposition bowed to a Supreme Court ruling that suspended three deputies. Though it lost its two-thirds majority, the opposition still maitains control of the parliament.

Assembly president Henry Ramos Allup, of the opposition Democratic Action party, said the parliament would study the decree next week and put it up for debate, calling members of the president’s economic team before lawmakers.

The government’s decree appeared geared to continue the same economic policies of exchange and price controls that critics say has driven the economy into the ground. It would give Maduro wider powers for 60 days to intervene in companies or limit access to currency. It also gives authorities special temporary powers to boost production and ensure access to key goods, including taking command of companies’ resources, and to impose currency controls.

“We want to reaffirm the trust of the Venezuelan people in the revolution,” said new economy vice president Luis Salas, who has argued that inflation does not really exist.

However Ramos Allup said the central bank figures published Friday showed that the current economic policies had failed. “President, the model has been wrong, the model is erroneous, and there are the results,” he said.


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