Venezuela Economy
Is Venezuela a wealthy country?
Venezuela, a country located in South America, has been grappling with an economic crisis for years. The situation has been deteriorating since 2014 when oil prices collapsed, and the government was unable to manage the economy. Since then, the country has experienced hyperinflation, scarcity of basic goods, and an exodus of millions of its citizens. In this article, we will examine the current state of the economy in Venezuela and the factors contributing to its current state.
The root of Venezuela's economic crisis can be traced back to its heavy reliance on oil exports. The country possesses the world's largest oil reserves, and the government relies heavily on oil revenues to fund its social programs and infrastructure development. However, the collapse of oil prices in 2014, coupled with the country's inefficient management of its oil industry, led to a drastic reduction in government revenues. This left the government unable to fund its social programs, pay off its debt, or even import basic goods such as food and medicine.
As a result, the country has experienced hyperinflation, with prices doubling every few weeks. The IMF estimated that inflation in Venezuela reached 1,199,000% in 2018, making the local currency virtually worthless. The government has been printing money to finance its spending, leading to an increase in the money supply, and ultimately, inflation. The devaluation of the local currency has also made it difficult for businesses to operate, as they struggle to access foreign currency to import raw materials and equipment.
The scarcity of basic goods has also been a significant challenge for Venezuelans. With the collapse of the local currency, businesses have been unable to import goods, leading to empty shelves in supermarkets and long queues for basic necessities. The government has tried to address this issue by implementing price controls, but this has only led to the creation of black markets, where goods are sold at exorbitant prices.
The exodus of millions of Venezuelans is another significant consequence of the economic crisis. As the situation worsens, more and more people are leaving the country in search of better economic opportunities and basic necessities. According to the UN, over five million Venezuelans have left the country since 2014, making it one of the largest migrations in recent history.
The government's response to the economic crisis has been largely ineffective. It has continued to print money to finance its spending, leading to further inflation and devaluation of the local currency. The government has also implemented policies such as price controls and nationalizations, which have only exacerbated the scarcity of goods and deterred foreign investment.
Venezuela Economy Data
What is the GDP of Venezuela?
| Currency Name and Code | Venezuelan Bolivar (VEF) |
| GDP - Gross Domestic Product (PPP) | $269,068,000,000 (USD) |
| GDP - official exchange rate | $131,900,000,000 (USD) |
| GDP - real growth rate | -10% |
| GDP Per Capita | $16,100.00 (USD) |
| GDP by Sector- agriculture | 3.9% |
| GDP by Sector- Industry | 32.9% |
| GDP by Sector- services | 63.2% |
| GDP - composition, by end use |
household consumption: 67.9% government consumption: 23.1% investment in fixed capital: 7.1% investment in inventories: 3.3% exports of goods and services: 6% imports of goods and services: -7.4% |
| Population Below Poverty Line | 37.9% |
| Inflation Rate | 29.8% |
| Labor Force | 13,300,000 |
| Labor Force By Occupation- agriculture | 7.3% |
| Labor Force By Occupation- industry | 21.8% |
| Labor Force By Occupation- services | 70.9% |
| Unemployment Rate | 12.1% |
| Fiscal Year | calendar year |
| Annual Budget | $50,120,000,000 (USD) |
| Budget Surplus or Deficit - percent of GDP | -9.8% |
| Public Debt (% of GDP) | 32% |
| Taxes and other revenues - percent of GDP | 28.1% |
| Major Industries | petroleum, iron ore mining, construction materials, food processing, textiles, steel, aluminum, motor vehicle assembly |
| Industrial Growth Rate | -8% |
| Agriculture Products | corn, sorghum, sugarcane, rice, bananas, vegetables, coffee; beef, pork, milk, eggs; fish |
| Exchange Rate per US Dollar | Venezuelan bolivar (VEB) |
| Child Labor - % of children ages 5-14 | 8% |
| Child Labor - # of children ages 5-14 | 404,092 |
| Commercial Bank Prime Lending Rate | 18% |