In an attempt to redress extreme macroeconomic imbalances that plague its economy, the Venezuelan government has engaged in a wide variety of policies designed to strengthen its control over the situation. These include a policy of nationalization that has accelerated government consolidation over the economy. More recently, the government chose to impose a multi-tiered exchange rate to impose tighter capital controls, address economic imbalances and make imported goods more affordable. However, this is an inherently inefficient and unstable policy that will exacerbate currency and price instability in the long-term. This chart shows the downward trend of Venezuelan gross domestic product (GDP) in contrast to the steady and high rates of inflation, and illustrates two of the fundamental economic problems facing Venezuela.
