The socialist government continues to inflict severe damage on the economy, which is compounded by poor management of the country's principal revenue generating industry, PDVSA.
May 18, 2021
Americas - South
Northern South America, bordering the Caribbean Sea and the North Atlantic Ocean, between Colombia and Guyana.
Upstream activities can be performed through joint venture corporations (empresas mixtas) in which the state owns more than 50% of the shares (qualifying the entities as state-owned enterprises). The National Assembly must approve the incorporation of any joint venture corporations and the conditions for their operation. These corporations are owned by Petróleos de Venezuela, S.A. (PDVSA).
According to the IMF, the Venezuelan economy grew by 5.6% in 2012 and 1.4% in 2013. Since 2014, Venezuela’s economy has been in recession, contracting 3.9% in 2014, 6.2% in 2015 and 18% in 2016. The IMF has forecast 7.4% contraction for 2017 and 4.1% for 2018. The IMF’s April 2017 report outlined that annual inflation reached 68.5% in 2014, 180.8% in 2015 and 274.4% in 2016. The report forecast that inflation is likely to reach over 1,300% in 2017 and over 2,500% in 2018. There are frequent shortages of basic goods, e.g. food staples, hygiene products and medicines. Since 2006 the Venezuelan government has pursued a policy of assuming State control of strategic sectors in the economy to promote national development. Such sectors include oil, power, metals and mining, and cement, among others. Foreign companies have been affected by this policy, but there are there are signs of a gradual change. Recent announcements around gold mining and offshore natural gas demonstrate a new collaborative approach from the government with the private sector to attract back foreign investment.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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