Economic Overview

Endowed with the largest oil reserves in the world, Venezuela is largely dependent on fluctuations in oil prices. The country experienced a 6% GDP growth in 2022 due to the increase in oil prices and the recovery in remittances sent to the country by Venezuelans abroad, followed by an estimated growth of 4% in 2023. Despite the recent recovery, GDP remains only one-fourth of the pre-crisis level in 2013. Venezuela has been in a deep recession since 2013, and according to the IMF, its GDP contracted more between 2013 and 2018 than the United States did during the Great Depression of 1929-1933. For 2024, the IMF forecasts growth at 4.5%.

The country's industrial activity continues to suffer from insufficient diversification and difficulties in importing intermediate products. The policy of redistributing petroleum through social measures was hindered by the weakness of oil prices, which have been in sharp decline since 2012, only recently recovering. This has reinforced the macro-economic imbalances that Venezuela suffers from. The consumer price index in Venezuela settled at 193% during 2023, slightly lower than expected, according to figures provided by the Venezuelan Observatory of Finance. Although this is the highest rate in the world, it is much lower than the level recorded the previous year when inflation stood at 305%. The hyperinflationary climate was created by several years of monetizing the public deficit, a free-falling currency that makes imports more expensive, a strong depreciation of the currency in both the official and black markets, and dramatic shortages of basic goods. The central bank’s policy of reducing the money supply is not expected to help reduce hyperinflation sustainably, as it does not address the economy’s key imbalances.Despite multiple minimum wage hikes decided by the government, real wages have continuously decreased, and household consumption is highly dependent on remittances from expatriates. Venezuela's government anticipates a 27% rise in revenue from the state-operated oil company PDVSA in 2024, following a loosening of U.S. sanctions amidst planned presidential elections and stagnant production. President Nicolas Maduro's administration projects total expenditure for the year to reach USD 20.5 billion, representing a 39% increase on 2023 spending. The temporary easing of sanctions, scheduled to remain in effect until April 2024 unless reversed by the U.S., has caused a surge in prices for Venezuelan crude. Analysts anticipate that this increase in revenue will prompt additional social spending by the government, aiming to secure support in the upcoming presidential election, in which Maduro is likely to seek reelection. According to the latest available data from the IMF, public debt stood at 159.5% of GDP in 2022 (down from 248.4% one year earlier).

In Venezuela, even though the minimum wage has been increased numerous times over the past few years, wage increases have not kept up with inflation. Therefore, purchasing power is weak and has greatly decreased in recent years; poverty has increased, and the health system is in a critical state. The unemployment rate has been rising for years, and the IMF estimated that this rate has surpassed half of the Venezuelan workforce. Nevertheless, the state has not released an official unemployment figure since 2021, when it claimed it was 7.9%. Furthermore, the country also faces a rise in insecurity, with the highest homicide rate in South America. Because of the country's current economic situation, there are severe shortages of basic goods, such as food and medicine - with Venezuela being among the countries with the highest rates of food insecurity in the world. As such, neighboring countries have been receiving a large number of Venezuelan migrants and refugees in recent years, with estimates suggesting that over 6 million people have left the country so far.

Foreign Trade

According to the latest available data, Venezuela’s foreign trade represented 67.2% of the GDP in 2017. The country’s economy strongly depends on hydrocarbons, as well as on loans from China and Russia. Traditionally, petroleum represents more than 75% of Venezuela’s exports. Manufactured products accounted for 16% of goods’ exports in 2021, and agricultural products for only 1.6% (data WTO). As per imports, the structure is as follows: agricultural products (34.7%), fuels and mining products (4.6%), manufactures (59.2%), and other (1.6% - data WTO, 2022).

According to the latest figures from OEC, Venezuela’s main export partners in 2022 were China (16.3%), Turkey (13.9%), Spain (12%), the U.S. (10.2%), and Brazil (8.3%). As per imports, China was the main source (31.4%), followed by the U.S. (23%), Brazil (13.8%), and Colombia (6.6%). Venezuela is a member of the Latin American Integration Association as well as the Global System of Trade Preferences among Developing Countries, and is looking to improve and increase its trade relations with the South-American zone, the EU, and China. However, even though Venezuela entered Mercosur in 2012 to develop trade with its neighbors, its membership was indefinitely suspended in 2017 because the country was infringing on the democratic clauses of the treaty.

According to the WTO, the country imported USD 10.1 billion of goods in 2022 and exported USD 4.7 billion of goods over the same period, marking increases of 30.7% and 33.2% year-on-year, respectively. Venezuela's foreign trade policy has been heavily impacted by international sanctions, particularly those imposed by the United States and other Western countries. These sanctions have targeted key sectors of Venezuela's economy, including oil exports, which historically formed the backbone of its foreign trade. As a result, Venezuela has faced significant challenges in accessing international markets and obtaining necessary imports, leading to shortages of essential goods and exacerbating economic instability. Additionally, the sanctions have constrained Venezuela's ability to engage in normal trade relations, forcing the country to seek alternative partners, often with limited success. The restrictions have also hindered foreign investment, further complicating efforts to diversify the economy and stimulate growth. Despite attempts by the Venezuelan government to navigate these challenges through various strategies, including increasing cooperation with countries like Russia and China, the impact of the sanctions continues to pose formidable obstacles to the country's economic recovery and stability.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Venezuela please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.