Venezuela Economic Outlook
May 19, 2020Venezuela’s depression appeared to deepen in the first quarter as the economy reels from the Covid-19 fallout and is poised to be among the hardest-hit countries in the region due to its dependence on oil exports. Dwindling refining capacity amid trickling oil output and U.S. sanctions have resulted in gasoline shortages, spawning black markets and causing prices to balloon. Moreover, power outages intensified in May, which, coupled with a shortfall in food availability and intensifying inflationary pressures, have stoked civil unrest. In response, the government enacted a 60% minimum wage hike on 1 May, while also raising pensions and food bonuses, presumably financed through additional money printing. Meanwhile, after Rosneft’s departure from the country in March casted uncertainty over the oil sector, authorities have approached Iran in order to secure vital gasoline supplies in exchange for gold.
Venezuela Economic GrowthThe economy is set to shrink for the seventh year running in 2020. Falling global demand for fuel and U.S. sanctions will cause oil output to crater, hampering the chief engine of economic activity and source of foreign exchange. In turn, government consumption should decline, complicating the state’s capacity to supply vital services to fight the pandemic amid brewing civil unrest. The LatinFocus Consensus projects the economy to contract 19.6% in 2020, which is down 2.0 percentage points from last month’s forecast. In 2021, the panel sees GDP shrinking 1.0%.
Venezuela Economy Data
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|Bond Yield||5.50||0.0 %||Aug 19|
|Exchange Rate||248,832||0.0 %||Aug 17|
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Venezuela Economic News
Venezuela: Inflation falls to over two-year low in May but remains sky-high and is expected to spike on Covid-19 fallout
June 8, 2020
National consumer prices rose 38.6% form the previous month in May, up from April’s 27.5% month-on-month increase and marking the highest print in four months, according to data released by the Central Bank of Venezuela (BCV) on 8 June.
Venezuela: Inflation falls to two-year low in March but remains sky-high and is expected to spike on Covid-19 fallout
April 24, 2020
National consumer prices rose 13.3% from the previous month in March, down from February’s 21.8% month-on-month increase and marking the lowest print since June 2017, according to data released by the Central Bank of Venezuela (BCV) on 24 April.
March 26, 2020
On 17 March, a nationwide quarantine was declared by the government to fight the Covid-19 health crisis.
February 4, 2020
National consumer prices rose 31.5% from the previous month in December, up from November’s 25.7% month-on-month increase, according to data released by the Central Bank of Venezuela (BCV) on 4 February.
October 19, 2019
On 19 October, the Central Bank of Venezuela (BCV) released fresh macroeconomic data for the first time in six months, underscoring the severity of the crisis currently gripping the country.