The complexity is the projection for the Venezuelan economy in 2025 as envisioned in the “Venezuela Economic Outlook Report. April 2025,” prepared by the Institute for Economic and Social Research (IIES) of the Andrés Bello Catholic University (UCAB). The report states that uncertainty and instability will characterize this economic period for the country.
The document highlights an adverse context due to the risks associated with global economic policies—especially those of the United States—as well as internal conditions. It explores key areas such as macroeconomic aggregates, the oil sector, economic activity levels, external sectors, fiscal aggregates, monetary aggregates and inflation, the real economy (manufacturing sector), the banking sector, the labor market, and compensation.
The study analyzes the real economy with a focus on the manufacturing industry, the banking sector, and the labor market. It also proposes economic policy measures and offers detailed macroeconomic projections considering the adverse national and international context.
The report is authored by Luis Zambrano Sequín (coordinator), María Antonia Moreno, Rafael Muñoz, Santiago Sosa, and Luis Zambrano Sequín, as macroeconomic and financial analysts; Santiago Sosa, expert in real economy and economic measurement policies; and Demetrio Marotta, specialist in employment and compensation. They received assistance from Gabriela Dávila and Keith Rangel.
Low Political and Institutional Capacity
The authors emphasize the tightening of relations with the new U.S. government under Donald Trump, as well as the unfavorable evolution of the oil market, which will worsen Venezuela’s non-competitive position as a hydrocarbon producer.
Additionally, it is warned that internal political instability will persist in 2025 and will be aggravated by questioning the results of the presidential elections on July 28, 2024, the growing border conflict with Guyana, regional elections, and the worsening of problems related to climate change.
The report indicates that these events unfold within an environment marked by a low political and institutional capacity to absorb these negative shocks. The significant weakness of the internal economy to sustain economic growth in a hostile environment adds to this already unstable context.
Oil Contraction and Inflation
A contraction in the oil sector is anticipated in 2025.
A contraction in the oil sector is expected due to the suspension of licenses for foreign companies, which will negatively impact exports and fiscal revenue.
The outlook is not much brighter regarding inflation, which is expected to rise significantly, with pressures on the exchange rate. The banking sector is believed to face liquidity constraints even with a slight recovery in assets that will be experienced.
Moreover, the private manufacturing industry—which showed mixed growth in 2023-2024—is expected to have uncertain sustainability in 2025. In terms of the labor market, it will continue to be affected by low wages, although a possible adjustment to the minimum wage is anticipated.
Venezuelan Economy in 2025: Complex and Challenging
Researchers believe that the year 2025 presents a complex and challenging economic landscape for Venezuela, as the economy faces various negative shocks, particularly those arising from political instability and the impact of sanctions, which will generate a contraction in GDP, acceleration of inflation, and pressures on the exchange rate.
The report indicates that the oil sector—essential for the Venezuelan economy—will experience a significant decline in activity, while the banking sector is expected to show some resilience in terms of income and assets, along with the ability to boost the economy through credit intermediation, which is severely limited by liquidity restrictions. As for the labor market, the report indicates it will remain marked by low wages, with possible discussions about adjustments.
Thus, a significant deterioration of the Venezuelan economic situation in 2025 is anticipated, given the described context of high uncertainty that we will elaborate on in subsequent reports.