Venezuela is in its sixth year of recession
GDP will fall 33.8% and consumption will fall 29.5% in 2019. El PIB caerá 33,8 % y el consumo bajará 29,5 % en 2019. Among the most affected industries are trading, transportation, insurance, banking and manufacture
The contraction of the Venezuelan economy in 2019 will be 33.8%. Since 2014, domestic production of goods and services has registered an accumulated drop of 70%, which cannot be compensated by private imports or remittances. And the two latter will not exceed 2 billion dollars by the end of the year.
“The most affected sectors in 2019 will be banking and insurance (-29.2%), transportation (-40.1), manufacturing (-39.7%), trade with (-38.1%), government services (-42.4%) and oil GDP (-28.7). For its part, the fall in consumption is -29.5%.”
The estimations appear in the Perspectives Report of the II Quarter elaborated by the consultant Aristimuño Herrera & Asociados. It points out that the possibilities of moderating such an acute decrease in consumption through external purchases, both public and private, is severely limited by the extreme financial difficulties the country is experiencing due to the recessionary dynamics of the crisis itself and to international sanctions.
In spite of its inconsistencies, the figures of the Central Bank of Venezuela (BCV in Spanish) reveal the magnitude of a crisis that does not seem to have any solution, at least in the short term. Venezuela is on the list of the ten countries that have suffered the greatest fall in GDP in five-year periods in the range 1960-2018.
The situation of the private sector is especially critical because the functioning of the public productive sector is between 10% and 15% of average capacity with particularly acute crises in the so-called basic sector of the Venezuelan economy.
L.Saenz
Source: Banca & Negocios
