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Venezuela – Important Facts

Venezuela is a country located in South America bordering the Caribbean Sea and the Atlantic Ocean. Venezuela has a strategic location on major sea routes linking North and South America. Neighboring countries include Brazil, Colombia, and Guyana. The geography of Venezuela is varied and consists of the Andes Mountains in northwest and the Guiana Highlands in southeast. The government system of Venezuela is a federal republic; the chief of state and head of government is the president. Venezuela has a largely command economy in which the central government directs the economy regarding the production and distribution of goods. Venezuela is a member of the Common Market of the South (Mercosur).

Venezuela remains highly dependent on oil revenues, which account for almost all export earnings and nearly half of the government’s revenue. The country ended 2015 with an estimated 10% contraction in its GDP, 275% inflation, widespread shortages of consumer goods, and declining central bank international reserves. The IMF forecasts that the GDP will shrink another 8% in 2016 and inflation may reach 720%. Falling oil prices since 2014 have aggravated Venezuela’s economic crisis. Insufficient access to dollars, price controls, and rigid labor regulations have led some US and multinational firms to reduce or shut down their Venezuelan operations. Market uncertainty and state oil company PDVSA’s poor cash flow have slowed investment in the petroleum sector, resulting in a decline in oil production.

Under President Nicolas MADURO, the Venezuelan Government’s response to the economic crisis has been to increase state control over the economy and blame the private sector for the shortages. The Venezuelan government has maintained strict currency controls since 2003. On 17 February 2016, the Venezuelan government announced a change from three official currency exchange mechanisms to only two official rates for the sale of dollars to private sector firms and individuals, with rates based on the government’s import priorities.

Important Details

  • Country ISO3 : VEN
  • Country Code : 862
  • Income Group : Upper middle income
  • Lending Category : IBRD
  • Region : Latin America & Caribbean
  • Currency Unit: Venezuelan bolivar fuerte
  • WTO Member : Yes
  • Trade organisations : WTO, OPEC, Unasur, MERCOSUR, ALBA
  • world rank : 176
  • Regional Ranking : 28th in the South and Central America/Caribbean Region