Venezuela facing 'economic collapse,' IMF warns

Venezuela is in a state of "economic collapse" with hyperinflation not see since the middle of the last century, the International Monetary Fund said Monday.

Despite higher oil prices that are benefitting most exporting nations, the IMF sees a worsening contraction of the economy, which in April already was forecast to decline 15 percent, with inflation this year of 14,000 percent.

"It's very hard to exaggerate the extent of disruption in the Venezuelan economy," IMF Chief Economist Maurice Obstfeld said.

Already the fund sees double-digit contraction in coming years and "we've increased our assessment about the degree of contraction," he told reporters.

In addition, "we're seeing a hyperinflation rivaled only by Zimbabwe and the great historical hyperinflation of the inter-war period."

The IMF did not release a new forecast for Venezuela in the quarterly update to the World Economic Outlook, which provides a limited set of estimates.

Obstfeld noted the wave of migrants fleeing Venezuela was having an impact on neighboring economies, even though there is no language barrier.

"Just as in other parts of the world there is a huge challenge to absorb these migrants," he said.

OPEC data show Venezuelan oil production crashed to a new 30-year low of 1.5 million barrels a day in June.

The South American nation earns 96 percent of its revenue through oil sales but a lack of foreign exchange has sparked economic paralysis that has left the country suffering serious shortages of food and medicine.

The government of socialist President Nicolas Maduro has told state oil company PDVSA to increase production in the country which sits atop the world's largest reserves of crude.