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Oil-dependent Venezuela has slid into recession, and inflation has skyrocketed to over 60 percent. Venezuela has been suffering from shortages of food and other basic goods for months.
Venezuela's central bank said on Tuesday that the South American country that has some of the largest oil reserves in the world had suffered three quarters of negative growth in 2014.
Gross domestic product (GDP) fell by 2.3 percent in the third quarter, after plummeting by 4.8 percent in the first and by 4.9 percent in the second. It was the first time growth figures were released this year. A recession is defined as two consecutive quarters of negative growth.
The rate of inflation, a figure that had not been released since August, shot up to 63.6 percent in November, making it one of the highest in the world.
While petrol is still cheaper than bottled water, prices for basic goods have shot up, leading to severe shortages, which helped fuel violent protests against President Nicolas Maduro's government from February to May. Forty-three people were killed.
In a marathon three-hour news conference on Tuesday Maduro blamed falling crude prices for the crisis. He accused the US of waging an "oil war" to hurt major crude exporters like Venezuela and Russia.
With crude prices falling in recent weeks, Opec member Venezuela's crude export price has sunk to just $48 (39 euros) per barrel from $95 per barrel in September. OPEC has ruled out production cuts to support prices.
Maduro on Tuesday vowed to rein in spending, but gave very little detail on any potential, fundamental changes. He has already introduced mandatory price cuts and rent controls to contain price rises, but to no avail.
Venezuela has been criticized for maintaining strict currency controls introduced by Maduro's predecessor Hugo Chavez in 2002. With the country's dollar reserves shrinking due to falling oil revenues - which are priced in dollars - the government is struggling, and as some critics say, unwilling, to allocate dollars adequately. As a result, staples have become more expensive.
Meanwhile, the government has used the controls to subsidize Barbie dolls for Christmas shoppers by offering an exchange rate subsidy to toy importers.
ng/bk (Reuters, AP, AFP)