Venezuelan Economy to Grow 20% This Year, Credit Suisse Says
- Growth may be among fastest globally in 2022, 2023, bank says
- Credit Suisse sees increased oil output bolstering economy
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Venezuela’s gross domestic product is poised to grow 20% this year as an increase in oil production fuels a dramatic rebound for an economy that cratered just two years ago, Credit Suisse Group AG said Wednesday.
The bank revised its forecast for 2022 economic output from 4.5% previously, while predicting that gross domestic product will expand an additional 8% in 2023, up from its previous estimate of 3%.
“These are not typos! If we are accurate, these might end up being among the strongest growth prints globally for these years,” economist Alberto Rojas wrote in a research note Wednesday. “However, we want to be clear, high growth prints should come as no surprise after the Venezuelan economy hit rock bottom in 2020.”
Credit Suisse also said that tax collections in dollar terms this year could expand more than 40%, imports could grow in excess of 15% and that Venezuela will record a current account surplus of about $4 billion. It also lowered it’s year-end annual headline inflation forecast to 70%, from a previous projection of 150%.
Read more: Venezuela Tries Capitalism and Its Migrants Start Coming Home
To be sure, Venezuela’s economy is a fraction of the size it used to be. According to one study, the economy would have to grow 10% a year for 18 straight years to get back to its size in 1997, a year before Hugo Chavez, Maduro’s mentor and predecessor, won the presidency for the first time.
Read more: Russian-Oil Cutoff Boosts Outlook for Venezuelan Output Revival
Russia’s invasion of Ukraine, the bank said, will likely lead to a “re-composition” in the global supply of oil, supporting moves to find a resolution to the Venezuelan crisis. The context is set for Venezuela’s president, Nicolas Maduro, to “find common ground” with the U.S. and perhaps reconsider his country’s ties to the “increasingly ostracized” Russia.
“Right now, Mr. Maduro should keep in mind that ideologies don’t pay the bills,” Rojas wrote.
— With assistance by Fabiola Zerpa
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