Nearly Half of Venezuela’s Consumption Relies on Imports

In Venezuela, imports account for about 45% of the country’s consumption, as highlighted by the Venezuelan Confederation of Industrialists (Conindustria).

Luigi Pisella, Conindustria’s President, mentioned this during the third-quarter Industrial Situation Survey.

He previously discussed the need for Venezuela’s industrial sector to enhance competitiveness, especially in dialogues with Nicolás Maduro’s government representatives.

The survey identified low domestic demand as the top issue affecting production, contributing to 90%.

It was followed by competition with imported products, perceived as unfair due to their tax exemption, impacting 85%.

The third major factor was the lack of financing, affecting 68% of production.

National demand decreased slightly, by two percentage points, from the previous period. In contrast, competition from imports increased by three percentage points.

Despite having the capacity to increase production, Venezuelan business owners are hindered by low purchasing power in the population.

This issue, following a minor improvement in 2022, limits their ability to sell products and services.

Businesses experienced declines of 6.8% and 13.2% in the first two quarters of the year.

However, the last three months saw a marginal reduction of just 0.1%, signaling improvement.

This change is attributed to increased utilization of installed capacity, which rose from 31.7% to 35.8%.

Looking to 2024, Venezuelan industrialists are optimistic.

They anticipate better sector performance, encouraged by the U.S.’s recent easing of sanctions on Venezuela’s oil, gas, and banking sectors.

This relief, lasting six months, was welcomed by 98% of survey respondents. It stems from renewed political dialogue between Venezuela’s opposition and the Chavez administration.

Credit availability has also shown progress, though it remains inadequate. The credit portfolio expanded by 323% over the past 22 months.

To fully revive production, the sector needs an investment of US$4 billion.