Country Insights

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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 ...

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Maduro survives blackouts but feels the international pressure
VENEZUELA - Report 26 Apr 2019 1 response
After 15 years of mismanagement, the national electric system collapsed last March, causing blackouts that left the country virtually without water, functioning hospitals, public transportation, or communications. There is now electricity rationing everywhere except Caracas, where Maduro fears so...

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BCV's designation as SDN
VENEZUELA - In Brief 22 Apr 2019
The designation of the Central Bank of Venezuela (BCV) as a Specially Designated National and Blocked Person (SDN) by the Office of Foreign Assets Control (OFAC) on 17 April 2019 focuses on the central bank's foreign reserve management. Licenses issued in conjunction with the designation exclude ...

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Depression mitigates hyperinflation
VENEZUELA - Report 10 Apr 2019
Depression is the price Venezuela is paying to slow down inflation. The government has focused on stabilizing the price of the dollar in the parallel market by using a reserve requirement policy that suffocates banks, freezes bank credit and paralyzes economic activity in order to mitigate inflat...

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U.S. sanctions against Bandes
VENEZUELA - In Brief 25 Mar 2019
On Friday, 22 March 2019, the U.S. imposed sanctions against the Bank of Economic and Social Development of Venezuela (Bandes) and four institutions it controls: Banco de Venezuela and Banco Bicentenario in Venezuela, Bandes Uruguay in Uruguay and Banco Prodem in Bolivia. All five have been desig...

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The regime escalates conflict after the Bachelet report
VENEZUELA - Report 21 Mar 2019
Venezuela’s massive blackout is a sign of the serious deterioration of public services and the deepening humanitarian crisis. Maduro intensifies repression. Regime change becomes more urgent but the time horizon seems to lengthen. Allied countries, including the U.S., abandoned the "credible t...

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Disinflation and depression
VENEZUELA - Report 10 Mar 2019 1 response
At the time this report was ready for distribution on Thursday, March 7, a blackout paralyzed Venezuela and is still ongoing. We don’t know yet the extent of the damage, when the supply of electricity will stabilize, and what the new normal will be. It’s too early to assess the damage. The bla...

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Maduro hangs on, but time isn’t on his side
VENEZUELA - Report 08 Mar 2019
The opposition lost some momentum after a month on the offensive when, on February 23, the Maduro regime used irregular armed groups and formal security forces to block aid shipments from coming in through Colombia and Brazil. With this move, the regime showed that it has no scruples in deploying...

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Guaidó's appointees
VENEZUELA - In Brief 05 Mar 2019
Guaidó is setting the scene for implementation of Plan País, the interim government’s stabilization program. Protecting Venezuelan assets abroad and securing heavy upfront funding are top priorities and his appointments are steps towards those goals. First, on February 13 the National Assembly ap...