Venezuela’s Economic Outlook 2022: Expect the unexpected

By E.C.V. & ASOCIADOS

The Venezuelan-American Chamber of Commerce and Industry (VenAmCham) discussed the country’s economic trends for 2022 in a conference with national and international speakers.

“In our country we have learned that nothing surprises us and, in this learning process, we are all growing,” said Luis Vicente García, General Manager of VenAmCham, mentioning the importance of companies to adapt to the new scenarios that will occur in 2022.

García exhibited data from an economic survey carried out in January by VenAmCham in which 37.7% of Venezuelan businessmen stated they will be able to develop their business plan this year in Venezuela, while 57.24% reported that, although with difficulties, they will also develop their business plans.

“Therefore, most businessmen are optimistic about economic outlooks for 2022. This is an indisputable demonstration of the resilience, adaptation capacity and innovation of the private sector”, García added.

The United States remains Venezuela’s most important trading partner, as U.S. goods and services trade with Venezuela totaled an estimated $5.7 billion in 2019. Exports were $3.6 billion; imports were $2.1 billion. Also, U.S. foreign direct investment (FDI) in Venezuela was $2.2 billion in 2019, a 2.0% increase from 2018. U.S. direct investment in Venezuela is led by nonbank holding companies, manufacturing, and professional, scientific, and technical services.

Venezuelans spontaneously began to adopt the U.S. dollar in 2019 as a way of fending off hyperinflation, which has allowed for tenuous growth in commerce and services. The government has also decided to relax economic restrictions, prompting more dollarization in the Venezuelan economy and producing signs of a rebound. In 2020, around 61% of the transactions in Venezuela were in dollars, according to Datanálisis.