Venezuela Economic Forecast

Venezuela Economic Outlook

July 11, 2018

Venezuela is sliding deeper into an economic and humanitarian crisis. Oil production, the country’s economic lifeline, dwindled to a new multi-year low in May on the back of the mismanagement of oil fields and insufficient investment. In addition, the state oil firm PDVSA’s exporting capacity has been hindered by ConocoPhillips’ seizing of some of the company’s Caribbean assets, and PDVSA has had difficulties fulfilling its contracts. Moreover, the bolivar continued to plunge in both the official and parallel markets in June, and incoming evidence points to sustained hyperinflation in the economy. Against a dire economic backdrop, President Nicolás Maduro reshuffled his cabinet in June, installing former Vice President Tareck El Aissami as industry and production minister. In a rare piece of good news, the government announced in early July that the China Development Bank has agreed to invest around USD 250 million in the battered energy sector.

Venezuela Economic Growth

Collapsing oil production, exchange rate misalignments and skyrocketing inflation are expected to keep Venezuela stuck in a deep economic crisis. Deep-seated reforms are needed to correct the economy’s current trajectory; however, the government has so far shown little appetite to change course on policy. Met the why particular panelists project GDP will contract for a fifth consecutive year in 2018, dropping an astounding 11.2%. It is far from certain that authorities will be able to hold on to power given the severity of the crisis, and some of our panelists have begun factoring in a potential political transition. In 2019, the panel sees GDP falling 3.3%.

Venezuela Economy Data

20132014201520162017
Population (million)29.830.230.631.031.4
GDP per capita (USD)12,38115,9296,042-  -  
GDP (USD bn)369481185-  -  
Economic Growth (GDP, annual variation in %)1.3-3.9-5.7-  -  
Domestic Demand (annual variation in %)-1.9-8.8-11.1-  -  
Consumption (annual variation in %)4.7-3.4-7.8-  -  
Investment (annual variation in %)-9.0-16.9-17.6-  -  
Manufacturing (annual variation in %)-0.3-7.2-5.4-  -  
Retail Sales (annual variation in %)-  -  -  -  -  
Unemployment Rate7.57.06.8-  -  
Fiscal Balance (% of GDP)-1.9-12.9-15.6-  -  
Public Debt (% of GDP)31.328.574.7-  -  
Money (annual variation in %)69.764.01111591,121
Inflation Rate (CPI, annual variation in %, eop)56.268.5181-  -  
Inflation Rate (CPI, annual variation in %)11.662.2122-  -  
Inflation (PPI, annual variation in %)52.4-  -  -  -  
Benchmark Interest Rate (%)14.7414.8414.5914.6214.77
Stock Market (annual variation in %)48041.02781173,884
Exchange Rate (vs USD)6.306.306.3011.0011.00
Exchange Rate (vs USD, aop)6.096.306.309.2911.00
Current Account (% of GDP)1.20.7-9.8-  -  
Current Account Balance (USD bn)4.63.6-18.2-  -  
Trade Balance (USD billion)31.627.22.2-  -  
Exports (USD billion)88.874.738.3-  -  
Imports (USD billion)57.247.536.1-  -  
Exports (annual variation in %)0.0-15.8-48.7-  -  
Imports (annual variation in %)0.0-16.9-24.0-  -  
International Reserves (USD)21.522.116.411.09.7
External Debt (% of GDP)35.928.272.5-  -  

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Venezuela Facts

ValueChangeDate
Bond Yield5.500.0 %Aug 19
Exchange Rate120,0000.0 %Jul 13
Stock Market112,0812.04 %Jul 13

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