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Venezuela is heading for bankruptcy, why can it happen?

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Hundreds of thousands of Venezuelans have fled abroad in search of a better life following the worsening economy of the South American country since mid-2017.

The International Monetary Fund (IMF) predicts the inflation rate in Venezuela could reach 13,000 percent in 2018.

Since January 2016, President Nicolas Maduro set an economic emergency status to overcome the severe conditions in the oil-rich country.

But until now Venezuela’s political and social conditions have become increasingly unstable. Anti-government protests expanded to a peak in mid-2017 and killed dozens of people.

Citing news from CNN, here are five reasons that can at least explain why Venezuela’s economic crisis continues to deteriorate:

  1. The fall in world oil prices

Most of Venezuela’s economy depends on petroleum commodities. At present, world oil prices have dropped to US $ 28.36 per barrel. The lowest price since the last 12 years.

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