In a remarkable turnaround, Venezuela’s economy is poised to outshine its neighbors, Colombia and Ecuador, with an expected 4% growth in 2024.
This growth exceeds the 2% average for Latin America, a feat all the more striking given the nation’s recent economic hardships.
The International Monetary Fund (IMF) attributes this revival to stable oil production and cautious optimism in economic management despite looming U.S. sanctions.
From 2013 to 2020, Venezuela’s GDP plummeted by a staggering 75%, underscoring years of economic decline.
However, since 2021, there’s been a notable shift. Oil output, though previously low, is modestly increasing, with even small gains notable given the starting point.
This growth contrasts sharply with Colombia and Ecuador, which forecast growth rates of 1.1% and 0.1%, respectively, in 2024.
These figures pale in comparison not only to Venezuela but also to larger economies like Brazil and Mexico, which expect growths of 2.2% and 2.4%, respectively.
Comparing Venezuela’s Recovery
Experts highlight the complexities of comparing Venezuela’s recovery with that of its neighbors.
Eduardo Fracchia from the IAE Business School noted Venezuela’s unique journey from prosperity to decline and, now, gradual recovery.
This path differs fundamentally from Colombia’s steady growth, which only saw a pause in 2020 due to the global pandemic.
Despite potential setbacks from renewed U.S. sanctions, particularly on oil and gas, the IMF remains optimistic about Venezuela‘s economic trajectory.
Rising oil production and lower inflation fuel optimism, but concerns persist over volatility in the economic landscape.
Additionally, analysts expect foreign investments and increased government spending to bolster economic stability.
Looking ahead, Venezuela aims to build on this momentum. In early 2024, analysts predict a 16% expansion in the oil sector, crucial for national revenue.
After a promising start with a 7.4% rise in crude exports, the nation is poised to regain regional economic prominence.