Venezuela Worst in World as IMF Forecasts 10% Contraction

[Marksman_91]

Source: Bloomberg

Venezuela will see its economy shrink more than any other country in the world this year as lower oil prices drain government coffers, according to the International Monetary Fund.

“Venezuela is projected to experience a deep recession in 2015 and 2016,” the IMF said Tuesday in its World Economic Outlook. The country’s real gross domestic product probably will contract 10 percent this year and 6 percent in 2016, it said.

President Nicolas Maduro’s policy response to the economic crisis remains paralyzed ahead of congressional elections set for Dec. 6. The bolivar has slumped to 792 to the dollar on the black market, while the official rate remains at 6.3. The government has also maintained fixed prices for staple foods, even as supplies run out in many shops and prices for other goods soar. Inflation in Venezuela, already the fastest in the world, will average 159 percent in 2015 and increase to 204 percent next year, the IMF said.

Among other countries expected to face economic contractions this year as the global economy expands 3.1 percent are Greece (-2.3 percent), Brazil (-3.0 percent), Russia (-3.8 percent) and Ukraine (-9.0 percent), according to the IMF.

Read more: http://www.bloomberg.com/news/articles/2015-10-06/venezuela-worst-in-world-as-imf-forecasts-economy-to-shrink-10-

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Just goes to show you it doesn't matter what side of the political spectrum a government claims to be in. If they're corrupt and/or mismanaged, they're destined to fail regardless if they're from the left or right.

[sharp_stick]

1. They are in big trouble

I don't know how they can get out of it.

[Marksman_91]

3. At this point, only a regime change could set the path to improvement

Maduro and the rest of the PSUV leadership show no signs whatsoever of taking responsibility for their mismanagement of the economy, and God knows how much the corruption runs through them. They're not gonna change any policies soon, since it's the current status quo that has allowed them to stay in power, and will continue to do so since they know they will face jail time if they lose the presidency and the General Assembly. They're doing everything they can now to stay in power even if it means that the rest of the country goes down the toilet, because they know that otherwise their crimes would be exposed, and be sentenced accordingly.

[iandhr]

4. But But But.

I was told VZ was a a paradise by many Duer's.


So your telling us it is not so? (Snark for those who don't understand what that is)

[Marksman_91]

16. It's rather unfortunate that the Chavista regime still has so many supporters here

Thankfully there's less and less of them every day. It's become damn near impossible now to keep defending the total screw up of Maduro and his government regarding Venezuela. Only conspiracy nutjobs are the ones remaining who still think he's some kind of great leader.

[StrongBad]

2. You mean central planning doesn't work? Shocking!

[Yo_Mama]

5. I hope they're wrong, because this country is too poor to handle that

Sometimes the IMF is wrong. The best case is still somewhere around 6%, though.

[Marksman_91]

7. No, Venezuela is not a poor country

Last edited Wed Oct 7, 2015, 07:52 PM - Edit history (1)

It's an oil producer, with the biggest reserves in the world, and has access to many other resources, and has a strategic geographic location, with coastlines on the Caribbean and a predominantly tropical climate. The problem is not that the country doesn't have money or lacks in richness, it's the fact that the Chavista government left all national production in ruin, and has neglected its infrastructure, and not to mention the economic policies which has only brought hyperinflation and a ridiculously devalued currency.

[7962]

8. Thats it in a nutshell.

[GreatGazoo]

17. Yes, Venezuala needs oil prices at $160 to break even this year

Obviously that is not going to happen. The Saudis are going broke and Russia could remake OPEC.

http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html

[Marksman_91]

20. What's funny is that the Maduro admin. claims that the oil price drop is all a conspiracy

They claim that it's a US-led conspiracy in collaboration with Saudi Arabia to cripple the economies of their enemies, namely Russia and Venezuela. They just don't want to admit they should've diversified the Venezuelan economy while they had the chance, especially a few years ago when oil was over $100 a barrel. Now they're suffering the consequences for being slackers and irresponsible.

[Tarheel_Dem]

6. It's all a USA/CIA/ONE % plot, or so we're told......repeatedly. n/t

[7962]

9. Dont know if we'll see that in this thread; its too hard to ignore real facts!! nt

[Marksman_91]

13. Ideologically blinded individuals don't care about facts

No matter if they're from the left or right

[ffr]

10. Recession. So what! As populations slow or contract it'll be

more and more prevalent. I'd suggest to break the paradigm stereotype about the words recession and expansion/growth.

Look it up. There is almost always a correlation between population growth & consumer demand. If population growth stagnates or declines, as it is doing in Russia, Ukraine, Germany and Japan, expect recessions. THERE'S NOTHING UNHEALTHY WITH THAT AT ALL. It's just an economic way of defining if the economy is expanding or contracting. Fewer people require less from their economies. So what!

[EX500rider]

15. So what?

Did you read this part:

".....as supplies run out in many shops and prices for other goods soar. Inflation in Venezuela, already the fastest in the world, will average 159 percent in 2015 and increase to 204 percent next year."

[ffr]

29. Well that's back of course, but did you read what I wrote?

Recessions will become commonplace in the future and that's not necessarily bad. In fact, it has to happen and it will have to be good, thus breaking the stereotype we have about the word recession.

[uhnope]

11. But they still have $$$ to fund 51% of the Telesur propaganda outlet

that's basically the RT of South America

Check out this kneeslapper http://www.telesurtv.net/english/news/Venezuela-Reaffirms-its-Commitment-to-Human-Rights-20150303-0016.html

Check out this familiar shilling liar from RT in her new job http://videos.telesurtv.net/en/video/441100/the-empire-files-441100

[COLGATE4]

12. They're still giving away oil to Cuba, as well. Go figure. nt

[Marksman_91]

14. Makes me wonder also about what that useful idiot of Mark Weisbrot thinks

He's always been a chavismo apologist, and even claimed about a year ago or so that Venezuela's inflation rate was gonna improve. That's when I realized he's probably just another paid-for shill by the Venezuelan government like Eva Golinger.

[Bacchus4.0]

26. Lately its the "US wants regime change" but here he is last year when it was Bs 88 to 1

Start about 2:00 for the economy. He says anyone can get dollars with that SICAD IIexchange rate. Says it undercuts the black market. At 6:30 he says he doesn't think the SICAD II rate will increase inflation.about 15:05 inflation has stabilized and the SICAD exchange should help.

Currently the exchange rate is at 800 Bs to 1

[Archae]

18. I have a hunch VN will go to war with Columbia...

Nothing better than a war to distact people from bad times.

Bush 2 created his war with Iraq, that has all the side effects like ISIS.

[GGJohn]

21. If that were to happen,

VN would be handed their ass by the Colombian military.
Colombia has a well led modern military with combat experience while the VN military is very poorly led, has no combat experience and are equipped with less than modern equipment.

[Marksman_91]

23. And not to mention that their high-ranking officials are all fatasses who live a luxurious life

They've had fortunes handed to them by the Chavista government to buy their loyalty, and all they really care about is living a luxurious lifestyle. They're utterly undisciplined, and have let themselves go really bad. The Venezuelan military would be crushed within a week if it went against Colombia, most likely because most other LatAm and Caribbean nations, as well as the US, would support Colombia more.

[GGJohn]

24. Well said.

Can't wait for the Chavista supporters to show up and tell us how wrong we are.

[Igel]

28. Nope.

Guyana's a better bet.

Weaker military, different kind of claim, and it would give Venezuela control over a lot more oil and shipping lanes. Moreover, the jingoistic rhetoric writes itself: The current border is the result of international (lic. European-led) tribunals and commissions, so of course the Bolivarian indigenous populations of S. America can't get a break. Doesn't help that Guyana has a large S. Asian and black population, not that anybody that's socialist or Bolivarian could possibly be a bigoted racist. (Maduro does sport a bigote, does he not?)

[Sunlei]

19. so dependent on their oil and they must have always sold crude very, cheap to China.

Now that China is BF with Putin, they probably buy Putins cheap crude and have dumped Venezuela. trade without real treaties is never good.

Such a beautiful country, I hope they can get their shit together and ramp up local agriculture. No need to sell out to cattle industry, go for the goats. goat milk is delicious.

[christx30]

22. I don't imagine anyone is willing

to put in the work to build anything, considering the government is able to come in and take anything they want at anytime.

[Freddie Stubbs]

25. Is Maduro a CIA operative purposefully destroying the Venezuelan economy?

[Lychee2]

27. This is like Hawaii when tourism takes a dive.

That's the curse of a one-industry economy.