Venezuela’s economy is poised to grow by as much as one-fifth in 2022 as a surge in production of crude triggers an eye-popping rebound for the nation’s GDP, which saw a dramatic decline amid US sanctions, according to Credit Suisse economist Alberto Rojas.
“These are not typos! If we are accurate, these might end up being among the strongest growth prints globally for these years,” Rojas wrote in a research note seen by Bloomberg.
“However, we want to be clear, high growth prints should come as no surprise after the Venezuelan economy hit rock bottom in 2020,” the note published on Wednesday reads.
The analyst added that tax collections in dollar terms in 2022 could see an enormous growth of more than 40%, while the country’s imports could expand over 15%.
Meanwhile, Venezuela will reportedly record a current account surplus of about $4 billion. The country managed to lower its year-end annual headline inflation forecast to 70%, from a previous projection of 150%.
The economy of the Bolivarian Republic has been under severe pressure in recent years, with the situation severely deteriorating after the US slapped the country with sanctions in 2019. The current penalties place Venezuela in fifth place in the global ratings of the most sanctioned nations.
At the time, the US and its allies recognized opposition leader Juan Guaido as the country’s legitimate president, following allegations of election rigging. Washington then ordered a freeze on all Venezuelan government assets in the US, and barred transactions with US citizens and companies. The UK joined in by freezing the country’s gold reserves held at the Bank of England.
The nation has been suffering from hyperinflation, which reportedly hit 3,000% in 2020. According to Credit Suisse, the Ukraine-related crisis may trigger a “re-composition” in the global supply of crude oil, supporting moves to find a resolution to the Venezuelan crisis, with Nicolas Maduro expected to “find common ground” with Washington.