Country Insights

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2019–2022 outlook: new government, stabilization, and recovery
VENEZUELA - Forecast 17 Sep 2019
We forecast Venezuela’s GDP, oil output and exports, inflation, and external accounts through 2022 assuming that an internationally brokered deal will lead to an interim government and new elections in 2020 and that the opposition will win and be able to govern starting in 2021. In our foreca...

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Monthly inflation at 46 percent and rising
VENEZUELA - Report 09 Sep 2019
We revise our August month-on-month inflation forecast to 46 percent, up from our previous forecast of 39 percent. Inflation has sped up markedly since its low of 21 percent in June. This acceleration is owed to a sharp increase in black market dollar prices in August, especially in the last wee...

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Colombian guerrillas add pressure to critical Venezuela talks
VENEZUELA - In Brief 02 Sep 2019
The resurgence of the Colombian guerrilla announced on Thursday 29 August by two of its former leaders, Iván Márquez and Jesús Santrich, is raising tensions in Venezuela as well as Colombia. Márquez and Santrich lead a group of Revolutionary Armed Forces of Colombia (FARC) dissidents who, in numb...

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A tale of many different speeds
VENEZUELA - In Brief 26 Aug 2019
A new but still incipient dynamic hints that political negotiations could bear fruit. Meanwhile, actors play on multiple boards seeking to strengthen their negotiating position or to cover themselves if talks fail. Members of the Norwegian government facilitation team visited Caracas in mid-Augus...

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No more disinflation
VENEZUELA - Report 14 Aug 2019
Disinflation ended. The rebound in monthly inflation we expected for August came in July as stronger public spending propped up consumption and the surge in the price of the dollar in the parallel market affected prices and expectations. We revised up our July inflation estimate to 32 percent fro...

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Negotiations, sanctions and worries
VENEZUELA - Report 10 Aug 2019
Respecting the secrecy imposed by Norway, government and opposition representatives have been negotiating in total confidentiality. The Norwegian Foreign Ministry's communiqué dated 2 August 2019 suggested there had been progress but agreements on critical issues were still pending. It emphasized...

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Disinflation: a pyrrhic victory
VENEZUELA - Report 08 Jul 2019
Disinflation is being driven by a sharp decline in consumption. Companies protect their cash flow by adjusting product lines and prices, generating volatility and lengthening the disinflation phase begun in February. We are seeing food price increases being followed by decreases one or two week...

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Challenges ahead
VENEZUELA - Report 01 Jul 2019
Government-opposition talks continue, a sign that all sides prefer a negotiated solution. The ongoing stalemate is catastrophic, and there are no other alternatives in sight to solve the crisis. Both parties have incentives to negotiate and are being pushed to do so by their respective internatio...

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Disinflate at any cost!
VENEZUELA - Report 17 Jun 2019
We revised down our inflation estimate for May to 36 percent (from 49 percent), very close to April (35 percent). In our view, weak consumption largely offset the effect of faster depreciation of the bolivar (51 percent in May vs. 21 percent in April). Cumulative inflation for January-May 2019 is...

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Enter Norway
VENEZUELA - In Brief 05 Jun 2019
Government and opposition delegations met in Oslo on 27-28 May 2019 in a new attempt to find a solution to the crisis, this time with the Norwegian government as mediator. The story repeats itself: negotiation appears on the scene after an episode in which neither party could impose itself on the...

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The central bank’s statistical shock
VENEZUELA - Report 31 May 2019
The BCV published an extensive set of macroeconomic data on May 28, 2019, after 40 months of pause. The collapse of economic activity and hyperinflation thus become a fact officially accepted by the government. The explanation of BCV’s action is elusive. According to some media, it reflects Ch...

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2019 Outlook: Suppose Maduro survives
VENEZUELA - Forecast 16 May 2019
With the Maduro regime so shaky, to anchor and focus our forecast, we assume regime survival through 2019 and project this year alone. In our next forecast report, we’ll present 2020-2021 forecasts under alternative regime scenarios. The Maduro regime wants to revive private industry and attac...

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Inflation heads back to 50% m-o-m and more
VENEZUELA - Report 15 May 2019
We revised down our April inflation estimate to 35 percent from 45 percent in our previous report. The price of the dollar in the parallel market rose by 21 percent, lower than our expected 42 percent, and consumption was weaker than expected for longer than expected. Accumulated inflation for Ja...

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Exchange freedom in a minefield
VENEZUELA - In Brief 10 May 2019
As of 7 May, individuals and private companies can buy and sell foreign currency through local commercial banks and exchange houses with no constraints on prices or amounts. Resolution N° 2019-05-01 of the Central Bank of Venezuela (BCV) dated 2 May 2019 sets out the rules. The new market largely...

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The crisis accelerates
VENEZUELA - In Brief 05 May 2019
The April 30 events took everyone by surprise by bringing into the open negotiations underway with members of Maduro's entourage. Soon after Juan Guaidó and Leopoldo López, suddenly freed from house arrest by his Bolivarian Intelligence Service (SEBIN) custodians, appeared at La Carlota Military ...