Venezuela Economic Forecast

Venezuela Economic Outlook

February 13, 2018

Policymakers changed the country’s exchange rate regime and devalued the bolivar over 80% at the start of February, a move aimed at easing a severe shortage of dollars and stemming black market activity. While the decision is a step in the right direction to correct exchange rate imbalances, the new DICOM rate is still drastically overvalued compared to the black market price of the bolivar. Moreover, it remains to be seen if there will be a sufficient supply of dollars in the new system to make it successful. Incoming evidence suggests Venezuela remains in a deep economic meltdown. Oil production dropped in December, while hyperinflation is expected to have run rampant in January. On the political front, the electoral commission set presidential elections for 22 April, moving the vote ahead from December as talks between the government and the opposition broke down. The vote appears set to be anything but free and fair, and it has been widely condemned by the international community.

Venezuela Economic Growth

Soaring inflation, shortages of basic goods and a high debt load will keep Venezuela in a deep recession this year. A turnaround in oil production, however, could breathe some life into the battered energy sector. FocusEconomics panelists see the economy contracting 6.7% in 2018, which is down 0.6 percentage points from last month’s forecast. In 2019, GDP is seen falling 1.6%.

Venezuela Economy Data

20122013201420152016
Population (million)29.429.830.230.631.0
GDP per capita (USD)12,95212,38115,929-  -  
GDP (USD bn)380369481-  -  
Economic Growth (GDP, annual variation in %)5.61.3-3.9-5.7-  
Domestic Demand (annual variation in %)12.3-1.9-8.8-10.1-  
Consumption (annual variation in %)7.04.7-3.4-7.8-  
Investment (annual variation in %)23.3-9.0-16.9-17.6-  
Manufacturing (annual variation in %)1.8-0.3-7.2-  -  
Retail Sales (annual variation in %)11.5-  -  -  -  
Unemployment Rate7.87.57.06.8-  
Fiscal Balance (% of GDP)-4.9-1.9-12.9-  -  
Public Debt (% of GDP)27.631.328.5-  -  
Money (annual variation in %)61.069.764.0101159
Inflation Rate (CPI, annual variation in %, eop)20.156.268.5181-  
Inflation Rate (CPI, annual variation in %)21.140.662.2122-  
Inflation (PPI, annual variation in %)16.652.4-  -  -  
Benchmark Interest Rate (%)14.5014.7414.8414.5914.62
Stock Market (annual variation in %)30348041.0278117
Exchange Rate (vs USD)4.306.306.306.3010.00
Exchange Rate (vs USD, aop)4.306.096.306.309.29
Current Account (% of GDP)0.71.20.7-  -  
Current Account Balance (USD bn)2.64.63.6-18.2-  
Trade Balance (USD billion)31.931.627.2-  -  
Exports (USD billion)88.888.874.7-  -  
Imports (USD billion)57.257.247.5-  -  
Exports (annual variation in %)-5.30.0-15.8-  -  
Imports (annual variation in %)8.80.0-16.9-  -  
International Reserves (USD)30.021.022.016.011.0
External Debt (% of GDP)34.435.928.2-  -  

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Venezuela Facts

ValueChangeDate
Bond Yield5.500.0 %Aug 19
Exchange Rate25,0000.0 %Feb 20
Stock Market5,1782.04 %Feb 20

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