Venezuela Economic Forecast

Venezuela Economic Outlook

February 12, 2019

Venezuela was thrust into a political crisis on 23 January when the leader of the opposition-controlled National Assembly, Juan Guaidó, declared himself interim president. With the U.S. and most countries in the European Union and Latin America recognizing his presidency, international pressure has mounted on President Nicolás Maduro to resign. The pressure was drastically ramped up on 28 January after the Trump administration imposed new sanctions against the state-owned oil firm PDVSA, effectively amounting to an oil embargo and which aim to block the Maduro government from accessing the country’s oil revenues. The sanctions are set to disrupt the government’s cash flow, curb oil production and exacerbate the economic crisis. Due to the highly contentious political environment and ever-changing domestic dynamics, the outcome from recent events remains highly uncertain.

Venezuela Economic Growth

The economic outlook has worsened amid heightened political tensions and the impact from the latest round of sanctions. Previously-imposed sanctions which hinder the country’s ability to access foreign credit and restructure debt continue to weigh on the already dire situation. As such, the economy is expected to remain in crisis, with GDP seen contracting for the sixth consecutive year in 2019. The possibility of a political transition has increased amid recent events, a scenario which some of our panelists have been factoring into their forecasts. Met the why particular panelists see the economy contracting 11.3% in 2019, which is down 0.6 percentage points from last month’s forecast. In 2020, the panel sees GDP falling 2.8%.

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 Market4,6112.04 %Feb 14

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