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COUNTRY INSIGHTS

Two 2020 pivot points
VENEZUELA · Report · 17 Dec 2019

As 2019 comes to a draw, short-term regime changes look distant. The opposition is in disarray; Maduro has the upper hand. We see three political scenarios for 2020–2021. They pivot on assumptions as to how two key events will play out next year: the appointment of a new National Electoral Co...

Year-end inflation call: 9,000 percent
VENEZUELA · Report · 11 Dec 2019

Consumer prices in November accelerated somewhat less than we had forecast, the result of Black Friday discounts at retail outlets and gentler-than-expected bolivar depreciation. Hence, we are revising our November inflation forecast to 34 percent from our earlier projection of 40%. We revise...

A way forward fraught with risk
VENEZUELA · Report · 25 Nov 2019

With the Maduro regime learning to live with sanctions but needing some stability to endure and the Guaidó-led opposition unable to force Maduro to step down, there is space for both sides to negotiate a renewal of National Electoral Council (CNE) members and the organization of 2020 National Ass...

Brief and costly inflation slowdown
VENEZUELA · Report · 12 Nov 2019

Inflation slowed down a little more sharply in October than we had expected, to 17 percent month-on-month from 63 percent in September. We had forecast 21 percent. Consumer prices rose by 4,916 percent in the first ten months of the year, for a year-on-year inflation rate of 38,906 percent in Oct...

Misguided dollar indexation
VENEZUELA · Report · 08 Nov 2019

In October 2019, the Central Bank of Venezuela (BCV) officially instituted dollar indexation in three spheres: commercial credit offered by banks, penalties for reserve requirement non-compliance, and rates on central bank open market operations. The BCV’s policy is ineffective and unsustainable....

BCV data on inflation and GDP in a nutshell
VENEZUELA · Report · 25 Oct 2019

After a five-month pause, BCV released data on inflation through September 2019, and on GDP and balance of payments through the first quarter 2019. This note addresses inflation and GDP. Our comments on balance of payments data will follow. BCV placed January-September 2019 accumulated inflati...

Oslo talks, uncertainty, and sanctions will continue
VENEZUELA · Report · 22 Oct 2019

After two months of silence, the regime seems to have presented a counteroffer to Norwegian diplomats mediating Venezuelan regime–opposition talks. The details aren’t public, but it’s likely that it follows the agreement the regime reached with the four minority ‘loyal” opposition parties. That a...

Temporary inflation slowdown coming up
VENEZUELA · Report · 08 Oct 2019

Inflation accelerated to 63 percent in September from 58 in August. That’s a slightly slower pace than our forecast of 66 percent. Prices were pushed up by an 89 percent jump in the black-market dollar‒bolivar rate in August, including a 45-percent spike in the last week of said month. Overall...

Regime makes one deal to avoid another
VENEZUELA · Report · 27 Sep 2019

The Maduro regime responded to the opposition’s proposal in Norway-mediated talks with weeks of silence and has now announced a separate “partial deal” with a set of minority parties in a “national dialogue for stability and peace”. The opposition’s proposal had aimed to create the conditions ...

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...

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...

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...

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...

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...

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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