Venezuela Economic Forecast

Venezuela Economic Outlook

February 14, 2017

The slump in oil prices has brought Venezuela to the brink of collapse. Dwindling oil revenues have exacerbated structural weaknesses in the economy, which have blown into an unprecedented social, political and economic crisis. In the absence of structural reforms and without a resolution to the political impasse, the country is set for another challenging year. While the dearth of real sector and inflation data from 2016 makes any assessment of the economy difficult, available data suggests that the economic prospects remain bleak: car sales contracted sharply in January and attempts by the government to alleviate volatility in the FX market have failed so far. Another triple-digit increase in the money supply in December suggests that inflation will keep spiralling out of control, increasing fears of hyperinflation in the oil-rich country.

Venezuela Economy Data

20112012201320142015
Population (million)29.129.530.030.530.9
GDP per capita (USD)10,85912,88512,40118,601-  
GDP (USD bn)316380372567-  
Economic Growth (GDP, annual variation in %)4.25.61.3-3.9-5.7
Domestic Demand (annual variation in %)7.612.3-1.9-8.8-10.1
Consumption (annual variation in %)4.07.04.7-3.4-7.8
Investment (annual variation in %)4.423.3-9.0-16.9-17.6
Manufacturing (annual variation in %)3.81.8-0.3-7.2-5.4
Retail Sales (annual variation in %)4.711.5-  -  -  
Unemployment Rate8.27.87.57.06.8
Fiscal Balance (% of GDP)-4.0-4.9-1.9-  -  
Public Debt (% of GDP)25.127.631.021.6-  
Money (annual variation in %)50.661.069.764.0101
Inflation Rate (CPI, annual variation in %, eop)27.620.156.268.5181
Inflation Rate (CPI, annual variation in %)26.121.140.662.2122
Inflation (PPI, annual variation in %)20.816.652.4-  -  
Benchmark Interest Rate (%)14.5014.5014.7414.8414.59
Stock Market (annual variation in %)79.130348041.0278
Exchange Rate (vs USD)4.304.306.306.306.30
Exchange Rate (vs USD, aop)4.304.306.096.306.30
Current Account (% of GDP)5.20.71.20.6-  
Current Account Balance (USD bn)16.32.64.63.6-18.2
Trade Balance (USD billion)41.231.931.627.2-  
Exports (USD billion)93.788.888.874.7-  
Imports (USD billion)52.657.257.247.5-  
Exports (annual variation in %)40.2-5.30.0-15.8-  
Imports (annual variation in %)26.08.80.0-16.9-  
International Reserves (USD)29.929.921.522.116.4
External Debt (% of GDP)37.534.435.624.0-  

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Venezuela Facts

ValueChangeDate
Bond Yield5.500.0 %Aug 19
Exchange Rate10.000.0 %Feb 22
Stock Market34,869-0.62 %Feb 22

Venezuela Economic Growth

February 14, 2017

While the government remains confident that higher oil prices will provide some relief, the economy will remain in an abysmal state without structural reforms such as price control removal, exchange rate unification and an improvement in the investment climate. FocusEconomics panelists see the economy shrinking 3.9% in 2017, which is up 0.2 percentage points from last month’s forecast. For 2018, the contraction is expected to soften to 0.6%.

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