A woman walks past a closed store in Caracas, Venezuela, whose shutter has been marked with graffiti reading “Is there bread?” on July 23, 2018. (Juan Barreto/AFP/Getty Images)

When the International Monetary Fund predicted this year that hyperinflation in Venezuela could top 13,000 percent, it seemed as if the South American country’s economic outlook could not get any worse.

It just did.

With the situation in the country deteriorating faster than expected, the IMF has unveiled a far more severe prognosis, saying that Venezuela’s hyperinflation is poised to reach an annualized rate of 1 million percent by year’s end.

That inflation rate is set to catapult socialist Venezuela into a rogue’s gallery of nations that have suffered the worst inflation rates in history. 

Venezuela’s “is one of the most severe hyperinflation situations that we’ve known about since the beginning of the 20th century,” said Robert Rennhack, deputy director of the IMF’s Western Hemisphere Department. 

According to a study by Steve H. Hanke, a professor of applied economics at Johns Hopkins University, Venezuela’s inflationary spiral as of May ranked as the 23rd highest ever recorded. The worst case on file remains Hungary after World War II, when inflation ran so rampant that prices doubled every 15 hours. More recently, Zimbabwe in the late 2000s and the former Yugoslavia in the mid-1990s saw peaks requiring calculators to sort out snowballing rates. 

Venezuela’s inflation is soaring as the economy has been broken by failed socialist policies, corruption and a collapsing oil industry. In addition, President Nicolás Maduro — the anointed successor of Hugo Chávez, who died in 2013 — has sought to cling to power by weakening institutions, packing the courts and, his critics say, stealing elections.  

Bills of the near-worthless local currency, the bolívar, are scarce — with the government having a hard time even paying for the paper needed to print them. Instead, the government is simply creating reams of electronic money paid into bank accounts, meaning that even small transactions are increasingly being done by bank cards and money transfers rather than in cash.

Maduro has tried to fix the problem, even creating a cyber-currency, the petro, which is theoretically backed by oil supplies. But nothing has worked.

The most extreme solutions in other countries have included abandoning local currencies altogether and adopting, for instance, the U.S. dollar. Yet such a move may be considered anathema in Venezuela, where Maduro has decried the United States as “the empire” out to destroy his nation. 

The country may be running out of options, however. Inflation is so high that Venezuelans are abandoning their nation in droves. An estimated 2 million are expected to exit this year, bringing to 3.8 million the total who have left since 2016.

A week ago, dishwasher soap cost 3.8 million bolívares; today, it’s 4.9 million. A kilogram of chicken — or 2.2 pounds — cost 3.3 million last week; today, it’s 4.2 million. 

Yaimy Flores, a 30-year-old Caracas housewife whose husband, a janitor, earns the minimum wage of 5,196,000 bolívares a month — worth about $3 at the black-market rate — said the family income can stretch to buy only two pounds of rice and a pound of cheese each month. They receive lentils, corn flour and a few other items via a government program. But the family has mostly cut out proteins and can no longer afford soaps and shampoos.

“We now have a tiny bit of soap left,” Flores said. “What we do is cut it in parts so that we’re conscious of how much we should use. I don’t know what our plan is when we finish that soap. I haven’t bought shampoo since last year.”

The IMF may even be underestimating the severity of Venezuela’s hyperinflation. Ecoanalitica, a Caracas-based financial firm, predicts that the inflation rate will shoot well past 1 million, reaching 1.4 million percent by December.

For a country that was once South America’s richest per capita, “it means a brutal cycle of impoverishment,” said Asdrúbal Oliveros, director of Ecoanalitica. “For a majority of Venezuelans that depend on their jobs and don’t have dollar savings or receive help from their family members abroad, an inflation like this one, that reaches more than 1 million, condemns them to poverty in a drastic way.”

Rachelle Krygier contributed to this report.