Venezuela Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Venezuela Country Risk Report
Product Price
$1,195.00

Core Views

  • Low oil prices, high inflation and a poor business environment will see Venezuela's recession stretch into its third year in 2016, and persist until 2018.

  • Major political gains on the part of the opposition in December's legislative elections will result in a gradual turn towards more orthodox economic policy, although the pace of change will be substantially hampered by the institutional strength of the PSUV and the power of the executive branch.

  • Political risk will remain elevated due to deteriorating living standards and lack of confidence in leadership to competently govern.

  • Inflation will remain elevated, at the highest level in Latin America, and the operating environment will remain very precarious for foreign multinationals in the country.

Major Forecast Changes

  • Due to increased political gridlock which has diminished the probability of meaningful and timely economic reform, we have downgraded our real GDP growth forecasts for 2016 and 2017. We forecast the economy to contract by 7.0% in 2016 and by 1.6% in 2017.

  • Following our Oil & Gas team's upgrade to oil prices, we believe that current account shortfall will be slightly narrower than we previously forecast, although still very wide by historical and regional standards, at 7.1% of GDP in 2016.

Key Risks

  • Upside Risks: If the Maduro administration were to decide to take steps towards meaningful economic reforms, investor sentiment would rebound relatively quickly, lowering financing costs and increasing FDI inflows.

  • Downside Risks: The potential for elevated political tensions to materialise in a wider political crisis could result in a further deterioration of investor sentiment and lower economic growth. Although we have already downgraded our oil price forecasts, downside risks still exist, due to abundant supply and subdued global demand for crude.

Macroeconomic Forecasts (Venezuela 2014-2017)
Indicator 2014e 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y -3.9 -7.6 -7.0 -1.6
Nominal GDP, USDbn 577.3 218.6 279.3 357.8
Consumer price inflation, % y-o-y, eop 68.5 180.9 236.3 130.0
Exchange rate VEF/USD, eop 6.29 47.15 101.01 206.96
Budget balance, % of GDP -11.8 -12.2 -15.1 -11.8
Current account balance, % of GDP 0.6 -8.1 -7.1 -2.9
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Economy Will Struggle Under High Inflation And Investor Disfavour
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Political Pressures Will Keep Budget Under Pressure
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURES CATEGORIES
13
External Trade And Investment Outlook
14
Gaping Deficit Will Narrow Slightly Amid Better Trade Dynamics
14
Outlook On External Position
15
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
16
TABLE: TOP 5 GOODS EXPORTS
16
TABLE: TOP 5 GOODS IMPORTS
17
Exchange Rate Policy
17
Greater Use Of Simadi Will Push Average Exchange Rate Weaker
17
TABLE: WEIGHTED AVERAGE EXCHANGE RATE FORECASTS
18
Exchange Rate Policy Framework
18
TABLE: YEARS-LONG DEVALUATION IN ALL BUT NAME
19
Chapter 2: 10-Year Forecast
21
The Venezuelan Economy To 2025
21
Growth Outlook In A Time Of Transition
21
TABLE: LONG-TERM MACROECONOMIC FORECASTS
21
Chapter 3: Political Outlook
23
SWOT Analysis
23
BMI Political Risk Index
23
Domestic Politics
24
PSUV Dominance Outside Legislature Will Persist Until 2019
24
TABLE: POLITICAL OVERVIEW
24
Structural Characteristics Of Government
26
Long-Term Political Outlook
27
Structural Challenges Will Keep Tensions High
27
Chapter 4: Operational Risk
31
SWOT Analysis
31
Operational Risk Index
31
Operational Risk
32
TABLE: OPERATIONAL RISK
32
Economic Openness
33
TABLE: TOP 5 IMPORT PARTNERS & PRODUCT IMPORTS, 2009-2013, USDMN
33
TABLE: FREE TRADE AGREEMENTS
34
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
35
Availability Of Labour
40
TABLE: LATIN AMERICA - AVAILABILITY OF LABOUR
41
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2008-2012
42
TABLE: TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS
43
Chapter 5: BMI Global Macro Outlook
45
Global Macro Outlook
45
Summer Of Risk
45
TABLE: GLOBAL ASSUMPTIONS
45
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
46
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
47
TABLE: MACROECONOMIC DATA & FORECASTS
49

Assess your risk exposure in Venezuela with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Venezuela with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report