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IMF says Venezuela is on track for 1 million per cent inflation

A closer look at the day's most notable stories with The National's Jonathon Gatehouse.

Newsletter: A closer look at the day's most notable stories

Despite the country's economic woes, Venezuelan President Nicolas Maduro recently participated in a military parade to celebrate the 197th anniversary of the Battle of Carabobo. (Miraflores Palace via Reuters)

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  • The International Monetary Fund is forecasting that Venezuela's inflation could reach one million per cent by the end of this year. Yes, one million.
  • A firestorm in a seaside town near Athens has killed at least 74 people and led the Greek government to solicit help from the EU.
  • The Tour de France is a gruelling race at the best of times, but Britain's Sky Team is facing additional resistance this year — from spectators. 
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Venezuela's economic oblivion

Venezuela's inflation rate is already at least 46,000 per cent, but things are about to get much worse.

Yesterday, the International Monetary Fund predicted that the country's real GDP will drop about 18 per cent this year — the third straight year the economy will contract by double digits. The IMF also says that inflation will top one million per cent by the end of 2018 if the government of Nicolás Maduro persists in trying to fill the gap by printing more and more money.

The precedents aren't good. The IMF compares the situation to 1923 Germany, where 29,000 per cent annual inflation fueled the rise of Hitler and the Nazi Party. Or Zimbabwe in late 2008, where the daily inflation rate was 98 per cent, meaning that prices doubled every 25 hours.

"The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods (health care, electricity, water, transportation, and security) as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries," notes Alejandro Werner, head of the IMF's Western Hemisphere department.

It wasn't that long ago that oil-rich Venezuela was South America's richest nation. But the global collapse in oil prices, political turmoil and international sanctions have hit hard.

No one is even really sure how much inflation there is currently. The Central Bank stopped sharing data in 2017. And the 46,000 per cent figure comes from opposition parties. Bloombergwhich has an index based on the price of a café con leche at a bakery in eastern Caracas, says prices have gone up 60,000 per cent over the last year. But during the past three months, the rate has accelerated even more dramatically, now touching 300,000 per cent.

Whatever the actual rate, the hardship is undeniable for average Venezuelans.

A nurse holds a placard reading 'worthy salary' during a protest in Caracas in June over the lack of medicine and poor conditions in hospitals. (Federico Parra/AFP/Getty Images)

Workers at the state-owned electricity company are striking over what they call "hunger wages" that are now worth the equivalent of $2.50 Cdn a month. A walkout is unlikely to improve the situation in a country where blackouts are now a regular occurence, disrupting life and municipal water supplies in major cities.

Most cars are now off the roads, as drivers either can't afford gas or find the parts to keep them going.

And the medical system, once a source of national pride, has all but collapsed, with chronic shortages of drugs and supplies and doctors and nurses fleeing the country.

On Saturday, Maduro pledged to inject close to $100 million US into the system to buy life-saving drugs for cancer, transplant and HIV patients. But it's unclear where the government will obtain the medicine.

Or, given the inflation, how far the money will go.

Apocalyptic fires in Greece

A wind-fueled firestorm swept through a seaside town near Athens last night, killing at least 74 people, with dozens more still missing and hundreds in hospital.

A woman confronts the carnage following a wildfire in the village of Mati, near Athens, Greece in July. (Costas Baltas/Reuters)

The blaze in the Rafina region, a popular vacation destination 30 kilometres east of the Greek capital, destroyed homes and vehicles and forced hundreds of people to make a desperate dash to the ocean in an attempt to escape the searing heat and flames.

Coast Guard vessels and private boats rescued more than 700 people from the beach and water in the town of Mati.

"The flames were chasing us all the way," Kostas Laganos, one of the survivors, told the media. "It burned our backs and we dived into the water." He compared the scene to the destruction of Pompeii by Mount Vesuvius in 79 AD.

But others were not so fortunate.

Firefighters found the bodies of 26 people — many of them children — atop a cliff overlooking the beach.

"Instinctively, seeing the end nearing, they embraced," the head of Greece's Red Cross, Nikos Economopoulos, told Skai TV.

Residents react as they look at their burned house following a forest fire in Mati. (Yannis Kolsesidis/EPA-EFE)

Others died on a road just metres from the shore, and as a wall of flame overtook a traffic jam, incinerating several cars. The fire was so hot that it left pools of melted aluminum on the asphalt.

At least 10 more people — several of them Polish tourists — drowned when one of the rescue boats capsized amidst the panic.

Vassiliki Psevedourou, another survivor, told Reuters that the speed of the fire made it almost impossible to escape, describing running from her home as the family's two cars exploded. "I could only see a blur, sparks and cars driving aimlessly."

Her cousin suffered severe burns as he tried to save his wheelchair-bound wife. "She fell," said Pservedourou. "We tried to lift her but it was impossible. My cousin then dragged her on the ground, trying to take her away to safety. His shoes melted from the heat, the ground was burning."

The wife is missing and presumed dead.

A firefighting helicopter flies over during a forest fire in Neo Voutsa, a northeast suburb of Athens, on July 23. (Alexandros Vlachos/EPA-EFE)

The blaze is the country's worst since wildfires in the southern Peloponnese peninsula killed dozens in the summer of  2007. Prime Minister Alexis Tsipras has called for three days of national mourning over the "unspeakable tragedy."

The Mati fire, and another large blaze near Kineta, to the west of Athens, are now largely under control, but the Greek government has asked other European nations to send water bombers, helicopters and firefighters to help with the mop-up operations.

Temperatures are set to rise again, raising fears of more brush fires. But Wednesday's forecast offers some relief, with predictions of heavy rain across southern Greece.

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Cycle of abuse

Britain's Team Sky is in a prime position to win its sixth Tour de France in seven years, but its riders have clearly lost the hearts of cycling fans.

Riders clean their stinging eyes after tear gas was used during a farmers' protest who attempted to block the 16th stage's route during the Tour de France on Tuesday. (Marco Bertorello/AFP/Getty Images)

After enduring weeks of boos, spitting and even physical assaults as the race winds its way around the country, Dave Brailsford, the team's head coach and general manager, lashed out at hostile spectators yesterday, suggesting their rudeness might be a "French cultural thing."

"I'm not sure they'd have liked their football players being spat at [at the World Cup] in Russia – I'm sure there would have been a word or two about that. But it's OK to spit on us, and on our staff?" Brailsford complained during a rest-day press conference. "Personally, I'd have a bit of an issue if that was going on in my country, but there we go. We'll just carry on."

With four stages remaining before this Sunday's ceremonial finish in Paris, Sky's Geraint Thomas holds the yellow jersey with a one-minute, 39-second lead over teammate Chris Froome, a four-time Tour winner.

But neither rider is getting much love.

The 32-year-old Thomas was booed off the podium on the weekend. "It's not a nice situation, because it's a highlight of my career," he told reporters afterwards, although he's willing to put up with it. "I would rather be in this jersey, having the race of my life and getting booed for whatever than being dropped on the first climb and everyone cheering you."

Froome, however, faces considerably more hostility. Last Thursday, during one of the long, slow climbs through the Alps, one fan reached out and punched him, while another tried to push him off his bike.

That was probably preferable to what happened Saturday, when a spectator doused Froome with the "unidentified contents" of a bottle, reviving memories of the 2015 race, when he was showered with urine by a disgruntled fan who accused him of cheating his way to the title.

A man, centre, expresses his disapproval of Britain's Chris Froome, left, by booing prior to the start of the fifteenth stage of the Tour de France in Carcassonne. (Christophe Ena/Associated Press)

(Today, Froome and Thomas were among several top riders who were inadvertently tear-gassed by French police trying to break up a road-blocking protest by angry farmers near Carcassonne.)

Team Sky's string of successes has been thrown into question by revelations about its generous use of possibly performance-enhancing drugs under therapeutic medical exemptions. Last March, a UK parliamentary committee determined that the team had "crossed an ethical line" with regards to heavy doses of asthma medication and "serious, unprofessional and inexcusable" record-keeping.

Froome, who tested positive for elevated levels of the asthma drug salbutamol during last year's Vuelta race in Spain, was initially barred from this year's Tour, but the doping case was dropped in late June.

Brailsford's pointed comments about the French are unlikely to improve the atmosphere for Team Sky.

Although things had probably reached their nadir on Sunday, when Gianni Moscon, an Italian who rides for the team, was disqualified for punching Elie Gesbert, a French rider from the Fortuneo-Samsic team, in what Tour officials described as a "particularly serious aggression."

A few words on...

Life in Toronto's Danforth neighbourhood.

Quote of the moment

"If this were a stroller or this were a car, [these donation bins] would be recalled. This cannot be what these charities actually want."

Saskia Wolsak, who was among several residents of Vancouver's West Point Grey neighbourhood who tried — and failed — to rescue a homeless woman who had become trapped in the hatch of a used clothing donation bin. The woman, in her 30s, died early Monday.

What The National is reading

  • Danforth shootings leave Torontonians wondering if city is 'unravelling' (CBC)
  • Hundreds missing after Laos dam collapse (BBC)
  • Hassan Diab to boycott external review of his 2014 extradition to France (CBC)
  • Italy buckles, agrees to 'temporarily' accept more migrants (The Times)
  • Eleven unborn babies die after Dutch women given Viagra in drug trial (Guardian)
  • Israel shoots down Syrian fighter jet (Haaretz)
  • Military fans out across Pakistan ahead of election (Agence France Presse)
  • Failed romance drives wedge through Australia's powerhouse swim team (Sydney Morning Herald)

Today in history

July 24, 1988: Nine-year-old flying ace soars into history

It took Emma Houlston two weeks to fly the 4,800 kilometres from Victoria, B.C., to Saint John's, N.L., earning herself a place in the record books as the youngest person to pilot a plane across the country. (Her father was along for the ride, but a video camera was rolling to verify that she was at the controls.) The kid from Medicine Hat, Alta., doesn't seem that excited when she makes the final touchdown with her stuffed animal in tow. Maybe that's because her dad was set to pilot the plane back West. "I get airplane sick when I'm not flying," she confided.

Nine-year-old flying ace soars into history

35 years ago
Duration 1:58
Under a sunny, blue sky, Emma Houlston lands her family's single-engine plane in St. John's, N.L. Despite a shaky landing, the touchdown means the nine-year-old makes history as the youngest person to pilot a plane across Canada.

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Jonathon Gatehouse

CBC Investigative Journalist

Jonathon Gatehouse has covered news and politics at home and abroad, reporting from dozens of countries. He has also written extensively about sports, covering seven Olympic Games and authoring a best-selling book on the business of pro-hockey. He works for the national investigative unit in Toronto.