34346
Economic Emergency in Venezuela
World Economy

Economic Emergency in Venezuela

Venezuela’s socialist government decreed an “economic emergency” that will expand its powers and published the first data in a year that shows the depth of a recession fueled by low oil prices and a sputtering state-led model.
The central bank, which has been lambasted by critics of President Nicolas Maduro’s government for hiding statistics since the end of 2014, said the South American OPEC nation’s economy shrank 4.5% in the first nine months last year, Reuters reported.
Inflation soared in that period to an annual rate of 141.5%, the world’s worst.
Venezuela’s oil-dependent economy is forecast to perform abysmally again in 2016. Maduro lost control of the National Assembly in a December election due to voter ire over the crisis.
The government’s decree, which the opposition-led assembly says it has the power to approve or reject, sets a 60-day “economic emergency” and would give Maduro wider powers to intervene in companies or limit access to currency.
“We are confronting a true storm,” Maduro said during his state-of-the-nation address to Congress. “This is not Maduro’s storm, as some believe, it is a situation throughout the country that affects every Venezuelan family.”
He vowed the country would continue servicing foreign debt despite slipping international reserves, negating growing Wall Street pessimism about a potential default this year.
He also insisted “the time has come” to raise heavily subsidized fuel prices. Economists say doing so is vital to fortifying foreign reserves, but it is a politically costly move that Maduro has avoided despite repeated promises.
National Assembly President Henry Ramos, a longstanding opposition leader, offered a jocular 40-minute response in which he chided Maduro and his policies and laughed off the heckling of Socialist Party lawmakers.

 Wall Street Gloom
Maduro, a former bus driver and foreign minister who was elected to replace Hugo Chavez in 2013, has stuck to his mentor’s policies of strict currency and price controls.
With massive shopping lines in Venezuela and widespread shortages of basics from milk to medicines, the government faces mounting pressure to change what critics call a failed model.
Venezuela depends on oil for 965 of hard currency revenues. The average price for its basket of oil and refined products fell this week to $24.38, the lowest level in more than 12 years.
“The biggest loser in Latin America of the decline in oil prices is clearly Venezuela. At this point, a credit event in 2016 seems difficult to avoid,” Barclays said in a research note.
The heaviest payments in Venezuela’s roughly $10 billion foreign debt bill for 2016 come in October and November.
The government blames its woes on the global oil scenario and what it says is economic sabotage by its foes.
According to the central bank, Venezuela’s current account deficit was $5.05 billion in the third quarter, hurt by the tumble in prices for its main export.

 

Short URL : http://goo.gl/ZAo5gn
  1. http://goo.gl/9vgTfg
  • http://goo.gl/pTJBzk
  • http://goo.gl/8cWpNb
  • http://goo.gl/fQYdvx
  • http://goo.gl/PnynNn

You can also read ...

An expanding trade war threatens to squeeze incomes.
The untold story of the world economy—so far at least—is the...
Russia has been seeking ways of decreasing dependence  on the US currency.
One of Russia’s largest banks, VTB is seeking to decrease the...
Uncertainty abounds in Malaysia, where a two-month-old government is only starting to give  a clearer picture of economic policy.
For Southeast Asia's biggest economies, 2018 wasn't supposed...
PwC Says Australian Firms Deliberately Going Broke
Companies that deliberately fail are costing the Australian...
Asian Stocks Retreat, European Shares Mixed
Asian stocks closed lower on Monday as investors digested the...
Turkey Budget Deficit Expands
Turkey’s central government budget balance recorded a deficit...
Experts Say China Can Cope With Uncertain H2
China is confident it can cope with a more uncertain second...
Chinese Premier Li Keqiang (C) shakes hands with Jean-Claude Juncker (L) and Donald Tusk after the meeting in Beijing on Monday.
China could open its economy if it wished, European Commission...

Trending

Googleplus