President Nicolás Maduro delivers a report on Venezuela's economy. Photo: Presidential Press.
The outlook for Venezuela’s continued economic recovery is positive.
The official data presented by President Nicolás Maduro in the 2023 annual economic report on the state of the Venezuelan economy shows a gradual recovery and provide an outlook of some stability, at least in terms of macro numbers.
A review of the graphs displayed in the Chamber of the National Assembly indicated that Venezuela’s economic recovery is constrained by the difficulties inherent to the blockade and illegal sanctions. However, it is also limited by the state’s ability to carry out exceptional economic measures and, in turn, meet international commitments with state and private economic actors that could allow for the revival of some sectors depressed by the crisis.
To give some context, it is necessary to approximate the amount of losses in gross revenue sustained by the national oil industry since the issuance of the so-called Obama Decree in March 2015 until today. Venezuela has lost some $232 billion as a result of these illegal sanctions.
Throughout this period, losses in oil production reached an estimated 3.995 billion barrels, having reached its nadir in June 2020, a year and a half after the Donald Trump administration imposed coercive measures against PDVSA. After this point, production has had slight ups and downs but has gradually returned to 2019 levels.
Other data on the economic, financial and commercial aggression against Venezuela:
- President Maduro stated that the patrimonial damage against Venezuela resulting from the blockade and the sanctions reaches $642 billion.
- In the last eight years, it is estimated that the extremist sectors of the opposition have robbed the country of $411 million per day.
This economic war against Venezuela bled the nation dry and had an incalculable impact on the economy and society as a whole. However, this situation has been changing its course in recent years. In 2022 alone, PDVSA earned Venezuela $4.758 billion in income, a figure that comes close to 2018 numbers.
This contributed to Venezuela’s double-digit economic growth from the third quarter of 2021 (16.72%) to the third quarter of 2022 (13.22%), with its highest peak in the second quarter of 2022 (23.30%).
Although right-wing economists insist that this picture is merely a rebound effect, the planning and measures taken by the executive and legislative powers are the guidelines that have led to the current context of recovery, without detracting from the fact that, indeed, there is an economic rebound after a fall, typical of capitalist crises.
Moreover, confidence in the recovery has been on the rise, and this is demonstrated by the following statistics: in 2022, bolivar deposits in the national financial system increased by 51%, reaching a peak in November. The growing confidence in the currency is important, as it is directly related to the relative stability of inflation and the exchange rate with respect to the US dollar during most of the year (with the exception of the last quarter).
From a productive point of view, the official figures point to a reactivation of public and private bank financing through credit, generating a momentum that has been gradually increasing since January 2020, with a growth of 112% in dollars over 11 months. The national government confirms that most of the credits are being distributed to the agri-food and microfinance sectors (entrepreneurs, etc.).
The above numbers are significant for national agricultural production, which has achieved an increase in the purchasing of food staples consumed by the population. These products, which include nationally produced foods as well as imported products, are staples in the kitchens of Venezuelan families and can now be found in supermarkets, markets and grocery stores in the commercial sectors of the country without any inconvenience.
Colombia’s Ecopetrol Asks US for Permission to Negotiate with Venezuela
The recovery of the industrial sector has boomed in 2022, with surpluses in paper production (virgin-milled and corrugated), in addition to a significant upturn in the tire and lubricant sector of the national automotive market.
Three more important financial facts:
- In 2022, tax collection increased by 97% ($4.744 billion) compared to 2021, achieved through the modification of tax mechanisms.
- Compared to 2021, the amount traded in the stock market grew by 1,216%. This was the result of a measure in which the state decided to sell shares of public companies, and private companies entered that commercial sector.
- The purchase-sale contracts carried out in the physical market in the Agricultural Products Exchange (Bolpriaven) had an average monthly nominal growth of 90%, reaching just over $40 million. This is combined with the already mentioned development of the growing agri-food market.
On the one hand, non-oil exports had an increase of 151.6% last year, increasing the diversification of external sources of foreign currency, which can be read as a sign of the boom in the productive economy promoted by President Nicolás Maduro’s government.
On the other hand, imports also grew by 106% in 2022, to the order of $8.2 billion. Of those imports, 77.1% went to the commercial sector, while the rest was imports of raw materials for the country’s various industries.
It is worth noting that all of these macroeconomic figures have had an impact on the quality of life of the Venezuelan population. The nutritional deficit has decreased after years of imposed crisis (7.7%), the national availability of protein in grams per day has increased (78.3), and only 2.3% of households maintain a certain degree of economic dependence (four or more household members per person with work and regular income), achieving the lowest levels since 2015.
Another key marker of economic recovery is unemployment. Venezuela’s unemployment rate dropped to 7.8%, remaining at the average for Latin America and the Caribbean (7.9%), according to the International Labor Organization.
CITGO, Valero, and PBF Refineries Vie for Venezuelan Crude Oil from Chevron
This brief panorama shows us a national economy that has rebounded, especially in 2022. The rebound was marked by an increase in productivity and in the frequentation of national financial markets for the leverage of some industrial and semi-industrial sectors.
Despite the inherent difficulties that come with operating under an illegal blockade and unilateral sanctions by the United States and European Union, the high inflation experienced by the entire region (and the rest of the world, mind you) and the disruption of global supply lines, the prospects for economic recovery in Venezuela are positive. The current panorama is crossed by favorable tailwinds, even when there are attempts to destabilize it via foreign aggression or by actions of an extremist anti-Chavismo that does not cooperate with the welfare of the nation.
Translation: Orinoco Tribune
OT/FV/SF
Misión Verdad
Misión Verdad is a Venezuelan investigative journalism website with a socialist perspective in defense of the Bolivarian Revolution
