Bloomberg reports that Venezuela has become the world’s most miserable economy when its jaw-dropping inflation rates reached eight million percent this year.
The strife-torn nation topped the rankings of Bloomberg’s Misery Index which measures inflation and unemployment outlooks for 62 economies. This is the fifth year Venezuela is ranked first while Singapore was ranked the second least miserable economy.
For Venezuelans, the report findings did not come as a surprise. Venezuela and other countries in the “most miserable” camp are in a lonely fight against parallel soaring inflation and unemployment rates.
The economy of oil-rich Venezuela has long collapsed and millions of people have left the country.
Those who stay have to face daily shortages of food and basic goods, years of recession, high inflation and regular power shortages. Even the president himself has major trouble reviving the wrecked economy.
For others, what is different this year is the policy makers’ challenge of having to deal with a mix of quiet inflation and lower unemployment that complicates readings on economic health, and related responses.
The “least miserable” economy was once more that of Thailand’s but this win is reportedly gaining skepticism due to the Thai government’s method of tallying unemployment and a general resourcefulness among Thailand’s recently jobless to quickly regain employment. Switzerland’s rise to the no.2 spot Singapore’s ability to remain in the bottom three of this category sems to have attracted more praise.
This Bloomberg Misery Index relies on the age-old concept that low inflation and unemployment generally illustrate how good a country’s residents should feel. This year’s scores are based on Bloomberg economist surveys, while prior years reflect actual data.
Sometimes, of course, a low score can be misleading in either category: Persistently low prices can signal poor demand in the economy, and exceptionally low unemployment rate discourages workers from switching to better jobs, for instance.
The Venezuelan government has not published economic data since 2016. So, analyst estimates can differ quite a bit from Bloomberg’s Cafe Con Leche Index, which is estimating a current inflation rate of 219,900 percent.
Also, it should also be noted that the price-growth trend in the misery index is a change from last year, when fears of creeping inflation raised scores for many countries.
Economists surveyed by Bloomberg see almost half of the 62 economies with lower inflation rates than in 2018, while a majority are forecast to see unemployment decrease.