MEXICO CITY: Venezuela's economic situation, blighted by the collapse of oil prices, is unsustainable in the medium term, a senior International Monetary Fund official warned on Wednesday.
Alejandro Werner, the director of the IMF's Western Hemisphere department, said the South American country's economy has "deteriorated even more" in recent months due to an energy crisis stemming from a lack of infrastructure and unfavorable weather.
With oil prices sapping Venezuela's gross domestic product, "the economic situation is clearly not sustainable in the medium term," Werner said at a news conference called to present the IMF's economic outlook for Latin America and the Caribbean.
Venezuela's revenue, highly dependent on oil exports, has dropped from $80 billion in 2013 to between $20 billion and $25 billion in 2015, according to the IMF.
GDP is forecast to fall eight percent this year while inflation is expected to exceed 700 percent this year, compared to 180.9 percent last year.
"It is very difficult to forecast, but it is clearly a situation in which the effects on the qualify of life and health of the population are beginning to be very significant," Werner said.
The IMF official said the country needs to take a "substantial turn in economic policy."
The region's economy will contract by 0.5 percent this year, dragged down by the political and economic crises in Venezuela and Brazil, the report said.
Venezuelan President Nicolas Maduro is facing rising pressure over his latest measures to deal with severe electricity shortages, including a two-day public sector workweek, as opponents pushed Wednesday for a referendum to remove him from office.
After daily power-cuts were imposed on Monday, looting was reported in several places including the country's second-biggest city, Maracaibo.
Comments
Comments are closed.