Venezuela Economic Forecast

Venezuela Economic Outlook

October 11, 2021

Activity is starting to show some timid signs of recovery, following years of economic crisis. Oil production jumped in year-on-year terms in July-August, averaging higher than in Q2. That said, a lack of dilutants seemingly weighed on crude oil output in the key Orinoco oil belt in September. Meanwhile, news reports indicate that the government is allowing firms to run several previously-nationalized food companies, while maintaining ownership, in an attempt to improve operations. In politics, in late September the country reached an agreement with Iran to exchange its heavy oil for Iranian condensate, in a bid to boost oil exports and work around U.S. sanctions. Meanwhile, the country recently removed six zeros from its currency and rebranded it as the “digital bolívar” from the “sovereign bolívar”, following the last overhaul three years ago, in an attempt to rein in hyperinflation.

Venezuela Economic Growth

The pace of economic contraction is expected to ease this year, and GDP should expand in 2022. That said, much depends on the extent of government intervention in the economy, the trajectory of inflation and the ability to rekindle oil production. Moreover, the evolution of U.S. sanctions and political agreements with the opposition are key factors to watch. The LatinFocus Consensus Forecast panel forecasts the economy to contract 0.6% in 2021. In 2022, the panel sees the economy emerging from recession, with GDP growing 3.6%, which is up 0.3 percentage points from last month’s projection.

Venezuela Economy Data

2015 2016 2017 2018 2019
Population (million)30.630.730.328.927.5
GDP per capita (USD)10,5689,0924,7553,411-  
GDP (USD bn)32427914498.4-  
Economic Growth (GDP, annual variation in %)-6.2-17.0-15.7-19.6-  
Domestic Demand (annual variation in %)-11.8-26.3-21.1-18.2-  
Consumption (annual variation in %)-8.9-19.4-16.2-20.1-  
Investment (annual variation in %)-20.4-45.1-45.3-37.5-  
Manufacturing (annual variation in %)-5.4-  -  -  -  
Retail Sales (annual variation in %)-  -  -  -  -  
Unemployment Rate6.87.37.26.9-  
Fiscal Balance (% of GDP)-15.6-16.8-18.2-  -  
Public Debt (% of GDP)74.792.3120-  -  
Money (annual variation in %)1011591,12163,2574,946
Inflation Rate (CPI, annual variation in %, eop)181274863130,0609,585
Inflation Rate (CPI, annual variation in %)12225543865,37419,906
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)14.5914.6214.7715.0024.00
Stock Market (annual variation in %)2781173,884126,9855,521
Exchange Rate (vs USD)6.3010.0010.00638.246,621
Exchange Rate (vs USD, aop)6.309.2910.0081.9415,910
Current Account (% of GDP)-5.6-0.46.18.7-  
Current Account Balance (USD bn)-16.1-3.98.78.6-  
Trade Balance (USD billion)3.911.022.020.9-  
Exports (USD billion)37.227.434.033.7-  
Imports (USD billion)33.316.412.012.8-  
Exports (annual variation in %)-50.1-26.424.2-1.0-  
Imports (annual variation in %)-29.5-50.9-26.66.5-  
International Reserves (USD)16.411.09.78.87.5
External Debt (% of GDP)38.645.778.7110-  

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Venezuela Facts

Value Change Date
Bond Yield5.500.0 %Aug 19
Exchange Rate248,8320.0 %Aug 17

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