Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
www.morochos.net
The recent devaluation of 100% in the bolivar says very eloquently how bad the Venezuelan economy is, with nothing suggesting that things will improve in the near future. Rather, if we take into account the current conditions in the country, we consider that the most likely scenario for 2010 is a recession with hyperinflation.
In terms of GDP, we estimate that it will fall -4% during the year due to the severe electricity crisis facing Venezuela, the climate of political instability and the private sector disinvestment by the lack of legal guarantees.
And if we talk about inflation, while many experts are calculating it around 50% for this year, our forecast is 26.2%. We consider this because consumption of goods and services will be drastically affected by the economic downturn described above, which will prevent -together with the government's draconian price controls- a greater increase in the value of products.
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- Electricity crisis deepens recession in Venezuela
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