Venezuela will end 2024 with economic growth close to 5%, according to specialists, who project it two points above the estimate of the International Monetary Fund (IMF). However, economic performance remains “weak,” analysts say.
“That number, which we have estimated, – close to 5% – is better than that of 2023. The question is whether we can sustain that number or improve it in 2025,” he told the Voice of America Tamara Herrera, from the firm Síntesis Financiera.
The pollster Datanalisis has a close figure. “Venezuela will grow 4.8%,” highlighted economist Luis Vicente León at a business forum in Caracas on October 29.
However, this number is not enough for an economy with years in the red. Nor so that it is perceptible in the quality of life of the population.
León, for example, noted that “Venezuela’s per capita income is the second lowest in Latin America.”
For his part, Herrera indicated that the Venezuelan economy “is a fragile economy, its consumer demand is fragile. You need to promote serious investments, investments that drive in the medium term, it is still a weak economy.”
Venezuela still shows the consequences of almost a decade of decline. Between 2012 and 2021, the country experienced a complex economic crisis, with an 80% reduction in the Gross Domestic Product (GDP) and hyperinflation for four consecutive years, between 2017 and 2022. The South American country began to show timid signs of recovery in 2022, but closed the year 2023 with a stagnant economy.
Maduro: “We rose from the ashes”
On September 9, President Nicolás Maduro indicated that economic growth could exceed 10% by the end of the year.
The Chavista ruler also stated that Venezuela will reach the lowest inflation in 25 years. “The total defeat of hyperinflation is going from strength to strength,” he assured.
“We rose from the ashes and they have not been able to and will not be able to. The Venezuelan economy will continue to advance,” he continued in another speech, broadcast on the state channel VTV.
But what makes the economy grow? “Oil growth, openness and dehostility,” responded León, from Datanalisis.
“There is a certain inertia to the operation, there is capital that is entering in dispersed forms, there is still a rhythm of activity that maintains consumption that is fragile, there is an ease of importing,” continues Herrera, who describes it as a “phase of observation” by merchants and businessmen, who are reactive and not proactive to the country context.
How is Latin America?
The International Monetary Fund – which estimates that Venezuela’s economy will expand by 3% – predicts growth in Latin America of 2.1% in 2024, and 2.5% in 2025.
According to the organization, Brazil will have an increase of 3%, Mexico 1.5%, Bolivia 1.6%, Colombia 1.6%, Ecuador 0.3%, Chile 2.5%, Paraguay 3.8%. Peru 3%, Uruguay 3.2%, Costa Rica 4%, El Salvador 3%, Guatemala 3.5%, Honduras 3.6%, Nicaragua 4%, Panama 2.5% and Dominican Republic 5.1%. Meanwhile, the IMF predicted that Argentina’s economy will contract by 3.5%.
Venezuela’s inflation, according to the Fund, will end the year at 60%, the second highest in the region after Argentina, which will have 140%.
“The great challenge for every public policy maker is to grow without inflation and we are not very well off there,” Herrera added.
For the average Venezuelan, with salaries that remain unrecovered, it continues to be difficult to afford even the most basic needs.
People: “living as they can”
“Everyone here is living as best they can, trying to survive. We thought that when these elections were held (the presidential elections last July), because everyone wanted a change, this was going to improve,” responds César Peña, a 65-year-old retiree.
For Betsaida Galíndez, administrator, “doing a market is a luxury,” in reference to essential purchases for your home. “You don’t make a market anymore, because you have to spend at least $500 to half buy something.”
Clemente Baute, another 68-year-old retiree, considered that the economy “has to adjust,” but celebrated that the Maduro government distributes bags of subsidized food, or delivers bonuses. “Most of us get bonuses.”
The legal minimum wage and pensions in Venezuela are 130 bolivars per month (about 3.5 dollars), to this are added bonuses provided by the government, with which workers can add up to 130 dollars, while retirees and Pensioners receive between 40 and 90 dollars.
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