Venezuela Economic Outlook
October 9, 2018The economy remains in dire straits. Despite oil prices hovering at a near four-year high, oil production continues to steadily decline, with the January through August average down nearly a third in year-on-year terms. Moreover, hefty financial obligations overhanging the state-run oil firm PDVSA only adds to the industry’s problems. Nearly USD 1 billion must be paid to holders of PDVSA 2020 bonds this month, which, if it were to default, could put its U.S.-based refining unit CITGO, which was used as collateral, at risk of takeover by creditors. In addition, PDVSA must pay USD 500 million to ConocoPhillips by the end of November, as part of the payment schedule agreed to in August to settle a USD 2 billion arbitration award granted to ConocoPhillips, in order to regain complete control of its oil facilities in the Caribbean. Further exacerbating matters, a delay in repairs at Venezuela's main oil port is likely to put additional pressure on its crude oil exports and thus constrain the ability to collect desperately needed hard currency. Nonetheless, China's decision in mid-September to extend a USD 5 billion credit line to the government should provide, at least temporarily, some breathing room. Meanwhile, authorities continue to roll out sweeping measures in a bid to stabilize the economy, with the latest being the official launch of the petro cryptocurrency on 1 October. Whether they are effective remains to be seen, however.
Venezuela Economic GrowthThe economy’s prospects remain grim. Analysts expect it will continue to be battered by rampant hyperinflation, plunging oil production and exchange rate misalignments. The government’s limited access to foreign financing due to financial sanctions also adds to the country’s woes. Given the severity of the crisis, conditions may emerge for a political transition, a scenario that some of our panelists have already begun to factor into their forecasts. FocusEconomics panelists see the economy contracting 13.1% in 2018. In 2019, the panel sees GDP falling 6.7%, which is down 2.5 percentage points from last month’s forecast.
Venezuela Economy Data
5 years of Venezuela economic forecasts for more than 30 economic indicators.
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|Bond Yield||5.50||0.0 %||Aug 19|
|Exchange Rate||248,832||0.0 %||Aug 17|
|Stock Market||367,050||2.04 %||Oct 11|
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Venezuela Economic News
September 10, 2018
On 20 August, a series of far-reaching economic reforms came into effect as President Nicolás Maduro once again strived to tackle spiraling inflation, stabilize the freefalling currency and overcome the deep economic crisis gripping the country.
July 9, 2018
At the twentieth Central Bank Dicom auction held on 28 June, the bolivar sold at 134,262.5 VEF per EUR (approximately 115,000 VEF per USD), weakening 20.1% from the 111,734.4 VEF per EUR (approximately 96,000 VEF per USD) rate in the previous auction held on 25 June.
July 5, 2018
The average price of Venezuela’s mix of crude oil came in at USD 64.5 per barrel (pb) in June, falling 1.2% from May’s average of USD 65.2 pb.
June 11, 2018
At the seventeenth Central Bank Dicom auction held on 8 June, the bolivar sold at 94,112 VEF per EUR (80,000 VEF per USD), weakening 0.8% from the 93,392 VEF per EUR (80,000 VEF per USD) rate in the previous auction held on 1 June.
June 8, 2018
The average price of Venezuela’s mix of crude oil reached USD 65.2 per barrel (pb) in May, the highest level in over three years.