Much attention has been paid recently to unfulfilled economic expectations in a number of large emerging nations, including China, Brazil, Russia, South Africa and Turkey. Here’s another under performer – Venezuela, home to about thirty million people.
As reported by the Associated Press, the economy there is projected to shrink by eight percent this year and inflation is anticipated to skyrocket past seven hundred percent. Foreign currency reserves have fallen to the point that Venezuela now has less cash on hand than when Hugo Chavez took power in nineteen ninety nine and oil prices were in the single digits.
Oil accounts for about ninety six percent of Venezuela’s export earnings and the decline in oil prices hit the government hard, leaving it with more debt to pay. Some analysts speculate whether the government will be able to meet approximately six billion dollars in bond payments due this year, much of it during the fourth quarter.
People there are not happy. There were more than twenty one hundred protests in Venezuela during the first four months of the year, or about seventeen per day.
