Venezuela Economic Forecast

Venezuela Economic Outlook

June 11, 2019

A rare release of data by the Central Bank of Venezuela (BCV) on 28 May revealed the sheer magnitude of the crisis currently gripping the country. Notably, the economy has shrunk by about half since 2013, with output plunging to levels not seen since the late 1990s. Moreover, despite oil production recovering by 28,000 barrels per day (bpd) in April from March, it has plummeted by more than 33% overall since January amid the crushing weight of oil sanctions and the power blackouts in March. Underlining the effect of U.S. sanctions, oil exports reportedly fell by nearly a fifth month-on-month to 874,500 bpd in May as some customers stopped purchasing oil from PDVSA, the state-owned oil company, to comply with the late-April deadline. On the political front, the power struggle between President Nicolás Maduro and opposition leader Juan Guaidó seems far from over as representatives of both parties failed to reach a diplomatic solution to the crisis in negotiations hosted by Norway in late May.

Venezuela Economic Growth

The near-term outlook is dire. The political stalemate between Maduro and Guaidó seems set to drag on, while financial sanctions and the oil embargo aimed at hindering the government’s access to hard currency, which accounts for the overwhelming majority of imports, worsens an already-crippled economy that has been stuck in depression for years. The possibility of a political transition remains high, a scenario which some of our panelists have factored into their forecasts. Met the why particular panelists see the economy contracting 24.6% in 2019, which is down 2.3 percentage points from last month’s forecast. In 2020, the panel sees GDP falling 3.8%.

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 Rate248,8320.0 %Aug 17
Stock Market14,4862.04 %Jun 13

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