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.

  • 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

  • We have downgraded our real GDP growth forecasts for 2016 and 2017, due to a further downgrade to our oil price forecasts, an upgrade to our inflation expectations and our expectations that policymaking will still be inhospitable to private investment.

  • Following inflation of 180.9% y-o-y in 2015, we expect inflation will accelerate, rather than slow, in 2016. We forecast average over 250.0% over the course of the year, and remain above 200.0% at year-end.

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 -5.7 -6.5 -0.6
Nominal GDP, USDbn 577.3 229.2 292.3 589.0
Consumer price inflation, % y-o-y, eop 68.5 180.9 236.3 130.0
Exchange rate VEF/USD, eop 6.29 47.39 75.38 128.78
Budget balance, % of GDP -11.2 -10.2 -13.8 -13.6
Current account balance, % of GDP 0.6 -4.3 -2.6 -1.1
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
Data Release Confirms Persistent Economic Challenges
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE : GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
10
Economic Reforms Are Insufficient But Symbolically Crucial
10
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURES CATEGORIES
12
External Trade And Investment Outlook
14
Severe External Account Weakness Will Persist
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
Currency Forecast
17
Immense Pressure On Bol-var Will Persist Following Modest FX Reforms
17
TABLE: YEARS-LONG DEVALUATION IN ALL BUT NAME
19
Exchange Rate Policy Framework
18
Regional Economic Outlook
20
Little Respite For Sovereign Risk In 2016
20
TABLE: KEY MACROECONOMIC INDICATORS - 2016 FORECASTS & TREND COMPARED WITH 2014
20
Chapter 2: 10-Year Forecast
25
The Venezuelan Economy To 2025
25
Growth Outlook In A Time Of Transition
25
TABLE: LONG-TERM MACROECONOMIC FORECASTS
25
Chapter 3: Political Outlook
27
SWOT Analysis
27
BMI Political Risk Index
27
Domestic Politics
28
Tense Legislative Inauguration Is Prelude To Prolonged Political Discord
28
TABLE: POLITICAL OVERVIEW
28
Structural Politics
29
Structural Characteristics Of Government
29
Long-Term Political Outlook
31
Structural Challenges Will Keep Tensions High
31
Chapter 4: Operational Risk
35
SWOT Analysis
35
Operational Risk Index
35
Operational Risk
36
TABLE: OPERATIONAL RISK
36
Trade Procedures And Governance
37
TABLE: LATIN AMERICA - TRADE PROCEDURES AND GOVERNANCE RISK
37
TABLE: IMPORT AND EXPORT DOCUMENTS
38
TABLE: TRADE PROCEDURES BREAKDOWN
38
Vulnerability To Crime
39
Chapter 5: BMI Global Macro Outlook
43
Global Macro Outlook
43
Tail Risks Mounting Amid Sub-Par Growth
43
TABLE: GLOBAL ASSUMPTIONS
43
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
44
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
44
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
45
TABLE: MACROECONOMIC DATA & FORECASTS
47

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.

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  • 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