Editing Economy of Venezuela (section)

== History ==
{{main|Economic history of Venezuela}}
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=== 1922–1959 ===
After oil was discovered in Venezuela in 1922 during the [[Maracaibo]] strike, Venezuela's dictator [[Juan Vicente Gómez]] allowed American [[oil companies]] to write Venezuela's petroleum law.<ref>Yergin, Daniel. ''The Prize: The Epic Quest for Oil, Money, and Power''. New York: Simon and Schuster. 1990. pp.&nbsp;233–236; 432</ref> In 1943, [[Standard Oil of New Jersey]] accepted a new agreement in Venezuela based on the 50–50 principle, described as "a landmark event".<ref>Yergin 1990, p. 435</ref> Even more favorable terms were negotiated in 1945, after a coup brought to power a left-leaning government that included [[Juan Pablo Pérez Alfonso]].

From the 1950s to the early 1980s, the Venezuelan economy, which was buoyed by high oil prices, was one of the strongest and most prosperous in South America. The continuous growth during that period attracted many [[immigrant]]s.

In 1958, a new government, again including Pérez Alfonso, devised a plan for an international oil [[cartel]], that would become [[OPEC]].<ref>Yergin 1990, pp. 510–513</ref>

During [[Marcos Pérez Jiménez|Pérez Jiménez']] dictatorship from 1952 to 1958, Venezuela enjoyed remarkably high [[GDP]] growth, so that in the late 1950s Venezuela's real [[GDP per capita]] almost reached that of Ireland or West Germany. Albeit, West Germany was still recovering from [[WW2]] destruction of German infrastructure. In 1950, Venezuela was the world's 4th wealthiest nation per capita.<ref>NationMaster. [http://www.nationmaster.com/graph/eco_gdp_per_cap_in_195-economy-gdp-per-capita-1950 "GDP per capita in 1950 statistics."].</ref> However, [[Rómulo Betancourt]], [[President of Venezuela|president]] from 1959 to 1964, inherited from 1958 to 1959 onward an enormous internal and external debt caused by rampant public spending. He managed to balance Venezuela's public budget and initiate an [[agrarian reform]].<ref>Alexander, Robert. [https://www.jstor.org/stable/2116216 "Nature and Progress of Agrarian Reform in Latin America."] ''The Journal of Economic History''. Vol. 23, No. 4 (December 1963), pp. 559–573.</ref>

=== 1960s–1990s ===
{{see also|Viernes Negro|Venezuelan banking crisis of 1994}}
Buoyed by a strong oil sector in the 1960s and 1970s, Venezuela's governments were able to maintain social harmony by spending fairly large amounts on public programs including health care, education, transport and food subsidies. Literacy and welfare programs benefited tremendously from these conditions.<ref>{{Cite book |last1=Márquez |first1=Laureano |title=Historieta de Venezuela |last2=Sanabria |first2=Eduardo |publisher=Gráficas Pedraza |publication-date=November 2018 |pages=111–115 |chapter=La democracia pierde energía |author-link=Laureano Márquez}}</ref> The first tenure of [[Carlos Andrés Pérez]] from 1974 to 1979 benefited from the [[1970s energy crisis]], tripling the amount of public spending and nationalizing the oil industry, establishing [[PDVSA]].<ref>Yergin 1990, p. 767</ref><ref name=":7">{{Cite journal |date=2021-10-21 |title=Chávez's Bolivarian Republic Viewed With a Quality Lens |url=https://articlegateway.com/index.php/JMPP/article/view/4679 |journal=Journal of Management Policy and Practice |language=en |volume=22 |issue=3 |pages=2–3 |doi=10.33423/jmpp.v22i3.4679 |issn=1913-8067}}</ref><ref name=":11">{{Cite journal |last1=McCoy |first1=Jennifer L |last2=Smith |first2=William C. |date=Summer 1995 |title=Democratic disequilibrium in Venezuela |journal=[[Journal of Interamerican Studies and World Affairs]] |volume=37 |issue=2 |pages=113|doi=10.2307/166273 |jstor=166273 }}</ref> He also increased government debt significantly, nationalized the iron industry, created new state-owned companies, nationalized the central bank and replaced its board with cabinet members, eliminating the bank's independence as a result. His government was also allowed to establish the first minimum wage and salary increases with an [[enabling act]] approved by the [[Congress of Venezuela|National Congress]]. Pérez was accused of excessive and disorderly public spending.<ref name=":7" /> Venezuela's external debt grew from $2 billion in 1972 to $33 billion by 1982.<ref name=":11" />

Venezuela's economic situation was reversed when [[1980s oil glut|oil prices collapsed during the 1980s]]. [[Luis Herrera Campins]] was elected just as the oil prices collapsed, with the economy experiencing turmoil throughout his tenure.<ref name=":8">{{Cite news |date=2024-02-23 |title=Luis Herrera Campins |url=https://www.thetimes.com/comment/register/article/luis-herrera-campins-8wxmtzw5ff5 |access-date=2024-02-23 |work=[[The Times]] |language=en |issn=0140-0460}}</ref><ref name=":9">{{Cite web |title=Luis Herrera Campíns {{!}} Venezuelan leader, politician, reformer {{!}} Britannica |url=https://www.britannica.com/biography/Luis-Herrera-Campins |access-date=2024-02-23 |website=[[Encyclopædia Britannica]] |language=en}}</ref> The economy contracted and [[inflation]] levels (consumer price inflation) rose, remaining between 6 and 12% from 1982 to 1986.<ref name=FTWD>{{cite book|last1=Heritage|first1=Andrew|title=Financial Times World Desk Reference|date=2002|publisher=Dorling Kindersley|isbn=978-0789488053|pages=618–621}}<!--|access-date=2 February 2015--></ref><ref name=inflation>[http://www.indexmundi.com/venezuela/inflation_rate_(consumer_prices).html "Venezuela Inflation rate (consumer prices)"]. Indexmundi. 2010. Retrieved 16 August 2010.</ref> Policies implemented by Herrera to reduce inflation and reverse increased government spending were not effective, resulting with the election of [[Jaime Lusinchi]] in the [[1983 Venezuelan general election]].<ref name=":8" /><ref name=":9" /> The Lusinchi administration continued strict [[foreign exchange controls]] and excessive spending while oil prices continued to decrease.<ref>{{Cite news |last=Neuman |first=William |date=2014-05-24 |title=Jaime Lusinchi, Ex-Leader of Venezuela, Dies at 89 |url=https://www.nytimes.com/2014/05/24/world/americas/jaime-lusinchi-ex-leader-of-venezuela-dies-at-89.html |access-date=2024-02-23 |work=[[The New York Times]] |language=en-US |issn=0362-4331}}</ref> Lusinchi focused the nation's funds on paying foreign debtors, sending $15 billion out to international lenders from 1985 to 1988 to tend the remaining $32 billion of debt.<ref name=":10">{{Cite journal |last=Ewell |first=Judith |date=March 1989 |title=Debt and Politics in Venezuela |journal=[[Current History]] |volume=88 |issue=536 |pages=121–124, 147–149|doi=10.1525/curh.1989.88.536.121 }}</ref> By the end of his presidency, the public began to suffer from inflated prices and shortages of basic goods.<ref name=":10" />
[[File:Caracazo looting 1.png|thumb|left|People looting stores during the [[Caracazo]] in 1989]]
[[Carlos Andrés Pérez]] based his campaign for the [[1988 Venezuelan general election]] in his legacy of abundance during his [[Carlos Andrés Pérez#First term as president|first presidential period]]<ref name="Marquez131">{{Harvsp|Márquez|Sanabria|2018|p=131}}</ref> and initially rejected liberalization policies.<ref name=":22">{{Cite magazine |last=Fastenberg |first=Dan |date=2011-01-10 |title=Carlos Andrés Pérez |url=http://content.time.com/time/magazine/article/0,9171,2040189,00.html |url-status=live |archive-url=https://web.archive.org/web/20210929074617/http://content.time.com/time/magazine/article/0,9171,2040189,00.html |archive-date=September 29, 2021 |access-date=2021-04-09 |magazine=[[Time (magazine)|Time]] |issn=0040-781X}}</ref> Venezuela's international reserves were only US$300&nbsp;million at the time of Pérez' election into the presidency; Pérez decided to respond to the debt, public spending, economic restrictions and [[rentier state]] by liberalizing the economy.<ref name="Marquez131" /><ref name=":12">{{Cite web |title=Venezuela's Chavez Era |url=https://www.cfr.org/timeline/venezuelas-chavez-era |url-status=live |archive-url=https://web.archive.org/web/20220517003924/https://www.cfr.org/timeline/venezuelas-chavez-era |archive-date=May 17, 2022 |access-date=2021-04-09 |website=[[Council on Foreign Relations]]}}</ref><ref name=":22" /> He announced a [[Technocracy|technocratic]] cabinet and a group of economic policies to fix macroeconomic imbalances known as ''{{ill|El Gran Viraje|es}}'' ({{langx|en|The Great Turn}}), called by detractors as ''El Paquetazo Económico'' ({{langx|en|The Economic Package}}). Among the policies there was the reduction of fuel subsidies and the increase of public transportation fares by thirty percent (VEB 16 [[Venezuelan bolívar]]es, or US$0.4).<ref name="Marquez132">{{Harvsp|Márquez|Sanabria|2018|p=132}}</ref><ref name="Rivero102">{{Harvsp|Rivero|2011|p=102}}</ref><ref name="margarita_l_m_2003_p120-1">Margarita López Maya, 2003. "The Venezuelan Caracazo of 1989: Popular Protest and Institutional Weakness", ''Journal of Latin American Studies'', Vol.35, No.1 (2003), pp 120-121 (See #Further reading).</ref> The increase was supposed to be implemented on 1 March 1989, but bus drivers decided to apply the price rise on 27 February, a day before payday in Venezuela. In response, protests and rioting began on the morning of 27 February 1989 in [[Guarenas]], a town near Caracas;<ref name="IACtHR">[http://www1.umn.edu/humanrts/iachr/C/58-ing.html El Caracazo Case, Judgment of 11 November 1999] {{Webarchive|url=https://web.archive.org/web/20160604024351/http://www1.umn.edu/humanrts/iachr/C/58-ing.html|date=June 4, 2016}}, Inter-American Court of Human Rights, accessed 1 May 2007</ref> a lack of timely intervention by authorities, as the {{ill|Caracas Metropolitan Police|es|Policía Metropolitana de Caracas}} was on a [[Strike action|labor strike]], led to the protests and rioting quickly spreading to the capital and other towns across the country.<ref name=":7" /><ref name=":02">{{Cite journal |last1=Lander |first1=Edgardo |last2=Fierro |first2=Luis A. |date=Jul 1996 |title=The Impact of Neoliberal Adjustment in Venezuela, 1989-1993 |url=http://journals.sagepub.com/doi/10.1177/0094582X9602300304 |journal=Latin American Perspectives |language=en |volume=23 |issue=3 |pages=50–73 |doi=10.1177/0094582X9602300304 |issn=0094-582X}}</ref><ref name="Rivero109">{{Harvsp|Rivero|2011|p=109}}</ref><ref name="GUARD1992">{{cite news |last1=Branford |first1=Sue |date=5 February 1992 |title=Hugo Chavez fails to overthrow Venezuela's government |url=https://www.theguardian.com/world/2016/feb/05/hugo-chavez-venezuela-failed-coup-1992 |access-date=7 February 2016 |agency=The Guardian}}</ref><ref name=":22" /><ref name=":12" />
[[File:CANTV_old_logo.svg|left|thumb|CANTV's old logo, state telecommunications company privatized in 1991.]]
By late 1991, as part of the economic reforms, Carlos Andrés Pérez' administration had sold three banks, a shipyard, two sugar mills, an airline, a telephone company and a cell phone band, receiving a total of US$2,287&nbsp;million.<ref name="Rivero180">{{Harvsp|Rivero|2011|pp=180–181}}</ref> The most remarkable auction was [[CANTV]]'s, a telecommunications company, which was sold at the price of US$1,885&nbsp;million to the consortium composed of American [[AT&T]] International, General Telephone Electronic and the Venezuelan [[Electricidad de Caracas]] and [[Mercantil Banco|Banco Mercantil]]. The privatization ended Venezuela's monopoly over telecommunications and surpassed even the most optimistic predictions, with over US$1,000&nbsp;million above the base price and US$500&nbsp;million more than the bid offered by the competition group.<ref name="Rivero179">{{Harvsp|Rivero|2011|p=179}}</ref> By the end of the year, inflation had dropped from 84% in 1989 to 31%,<ref name="inflation" /> Venezuela's international reserves were now worth US$14,000&nbsp;million and there was an economic growth of 9% (called as an "Asian growth"), the largest in Latin America at the time.<ref name="Rivero180" /><ref name="Disaster averted in Venezuela">{{Cite news |date=5 February 1992 |title=Disaster averted in Venezuela |work=[[Montreal Gazette]] |pages=B2}}</ref><ref name=":03">{{Cite journal |last1=Lander |first1=Edgardo |last2=Fierro |first2=Luis A. |date=Jul 1996 |title=The Impact of Neoliberal Adjustment in Venezuela, 1989-1993 |url=http://journals.sagepub.com/doi/10.1177/0094582X9602300304 |journal=Latin American Perspectives |language=en |volume=23 |issue=3 |pages=50–73 |doi=10.1177/0094582X9602300304 |issn=0094-582X}}</ref><ref name=":32">{{Cite book |last=DiJohn |first=Jonathan |title=The Political Economy of Anti-Politics and Social Polarization in Venezuela, 1998-2004 |date=December 2005 |publisher=[[London School of Economics]] |pages=14–15 |language=en}}</ref> While foreign debtors were repaid and the economy grew, by 1992, the majority of economic benefits were experienced by the upper class while middle to lower classes faced increased poverty and high unemployment rates between ten and forty percent.<ref name="Disaster averted in Venezuela"/>{{Verify source|date=March 2024}}<ref name=":032">{{Cite journal |last1=Lander |first1=Edgardo |last2=Fierro |first2=Luis A. |date=Jul 1996 |title=The Impact of Neoliberal Adjustment in Venezuela, 1989-1993 |url=http://journals.sagepub.com/doi/10.1177/0094582X9602300304 |journal=Latin American Perspectives |language=en |volume=23 |issue=3 |pages=50–73 |doi=10.1177/0094582X9602300304 |issn=0094-582X}}</ref>{{Verify source|date=March 2024}}<ref name=":322">{{Cite book |last=DiJohn |first=Jonathan |title=The Political Economy of Anti-Politics and Social Polarization in Venezuela, 1998-2004 |date=December 2005 |publisher=[[London School of Economics]] |pages=14–15 |language=en}}</ref>{{Verify source|date=March 2024}}

Overreliance on oil exports and a fractured political system without parties agreeing on policies caused many of the problems.<ref name="DRAGONp5">{{cite book|last1=Corrales|first1=Javier|last2=Penfold|first2=Michael|title=Dragon in the Tropics: The Legacy of Hugo Chávez|date=2015|publisher=[[Brookings Institution Press]]|isbn=978-0815725930|page=5}}</ref> By the mid-1990s, Venezuela under President [[Rafael Caldera]] saw annual inflation rates of 50–60% from 1993 to 1997, with the country suffering a [[Venezuelan banking crisis of 1994|banking crisis]]. In 1998, the economic crisis had grown even worse. Per capita GDP was at the same level as 1963 (after adjusting 1963 dollar to 1998 value), down a third from its 1978 peak; and the purchasing power of the average salary was a third of its 1978 level.<ref>Kelly, Janet, and Palma, Pedro (2006), "The Syndrome of Economic Decline and the Quest for Change", in McCoy, Jennifer and Myers, David (eds, 2006), ''The Unraveling of Representative Democracy in Venezuela'', [[Johns Hopkins University Press]]. p. 207</ref>

=== 1999–2013 ===
{{main|Economic policy of the Hugo Chávez government}}
[[Hugo Chávez]] was [[1998 Venezuelan presidential election|elected President in December 1998]] and took office in February 1999. From 1999 to the end of 2012, when Hugo Chavez health decayed preventing him from fulfilling any [[President of Venezuela|presidential]] duties,<ref name=":15">{{Cite web |date=2012-12-31 |title=Venezuela VP: Chavez suffers 'new complications' |url=https://www.nbcnews.com/id/wbna50327377 |access-date=2024-12-17 |website=NBC News |language=en}}</ref> the [[GDP]] grew from 97.52 billion dollars to 372.59 billion dollars.<ref>{{Cite web |title=Venezuela - Gross domestic product (GDP) 2025 |url=https://www.statista.com/statistics/370937/gross-domestic-product-gdp-in-venezuela/ |access-date=2024-12-17 |website=Statista |language=en}}</ref>  In the same period, inflation remained stable around 20% year.<ref>{{Cite web |title=Venezuela - Inflation rate 2025 |url=https://www.statista.com/statistics/371895/inflation-rate-in-venezuela/ |access-date=2024-12-17 |website=Statista |language=en}}</ref> 

From 1999 In 2000, oil prices soared, offering Chávez funds not seen since Venezuela's economic collapse in the 1980s.<ref name="FTWD" /> Chávez implemented economic policies that leaned toward [[social democracy]], utilizing oil revenues to fund social programs. These policies increased Venezuela's economic reliance on high [[Price of oil|oil prices]].<ref name="FTWD" />

During the first four years of Chávez's presidency, the economy initially grew between 1999 and 2001 but contracted from 2001 to 2003, returning to GDP levels similar to those of 1997. The early decline was influenced by low oil prices and later exacerbated by the events surrounding the [[2002 Venezuelan coup attempt|2002 coup attempt]] and the [[2002–2003 general strike]]. Additional contributing factors included [[capital flight]] and reduced [[Foreign direct investment|foreign investment]]. GDP decreased from 50.0 trillion bolívares in 1998 to 42.4 trillion bolívares in 2003 (measured in constant 1998 bolívares).<ref>Weisbrot and Sandoval, 2008. Sections: 'Executive Summary,' and 'Social Spending, Poverty, and Employment.'</ref>

The hardest-hit sectors in the worst recession years (2002–2003) were [[construction]] (−55.9%), [[petroleum]] (−26.5%), [[commerce]] (−23.6%) and [[manufacturing]] (−22.5%). The drop in the petroleum sector was caused by adherence to the OPEC [[Quota share|quota]] established in 2002 and the virtual cessation of exports during the PdVSA-led general strike of 2002–2003. The non-petroleum sector of the economy contracted by 6.5% in 2002. The bolívar, which had been suffering from serious inflation and devaluation relative to international standards since the late 1980s,<ref>{{cite web|url=http://data.worldbank.org/indicator/NY.GDP.DEFL.ZS?contextual=region&locations=VE|title=GDP deflator (base year varies by country) {{!}} Data|date=19 August 2016|website=data.worldbank.org|publisher=World Bank national accounts data and OECD National Accounts data files.|archive-url=https://archive.today/20160819232615/http://data.worldbank.org/indicator/NY.GDP.DEFL.ZS?contextual=region&end=2013&locations=VE&start=1985&view=chart&year_high_desc=false|archive-date=19 August 2016|access-date=19 August 2016|url-status=dead}}</ref> stabilized around 20% inflation.<ref>{{Cite web |title=Venezuela - Inflation rate 2025 |url=https://www.statista.com/statistics/371895/inflation-rate-in-venezuela/ |access-date=2024-12-17 |website=Statista |language=en}}</ref>

During [[Hugo Chávez|Chávez's presidency]], [[inflation]] was significantly reduced and maintained at an average of around 20%, marking a substantial improvement compared to the late 1980s and the turbulent 1990s, when inflation reached its highest point at 100% in 1996. The inflation rate, as measured by the [[consumer price index]], stood at 35.8% in 1998, dropped to a low of 12.5% in 2001, and rose to 31.1% in 2003.<ref>{{Cite web |title=Venezuela - Inflation rate 2025 |url=https://www.statista.com/statistics/371895/inflation-rate-in-venezuela/ |access-date=2024-12-17 |website=Statista |language=en}}</ref> In response to pressures on the [[Venezuelan bolívar|bolívar]], declining [[international reserves]], and the economic impact of the oil industry work stoppage, the [[Ministry of Finance (Venezuela)|Ministry of Finance]] and the [[Central Bank of Venezuela|central bank]] suspended foreign exchange trading on January 23, 2003. Shortly afterward, the government established [[CADIVI]], a currency control board, on February 6, 2003. CADIVI regulated foreign exchange procedures and set the exchange rate at 1,596 bolívares per US dollar for purchases and 1,600 bolívares per US dollar for sales.

The [[Real estate business|housing market]] in Venezuela shrunk significantly with developers avoiding Venezuela due to the massive number of companies who have had their property expropriated by the government.<ref>{{cite news|last=Grant|first=Will|title=Why Venezuela's government is taking over apartments|url=https://www.bbc.co.uk/news/world-latin-america-11756492|access-date=15 December 2013|newspaper=BBC|date=15 November 2010}}</ref> According to [[The Heritage Foundation]] and ''[[The Wall Street Journal]]'', Venezuela had the weakest property rights in the world, scoring only 5.0 on a scale of 100, with expropriation without compensation being common.<ref>{{cite news|title=Expropriations in Venezuela|newspaper=The Economist|date=29 October 2010}}</ref> The housing shortage in Venezuela was significant enough that, in 2007, a group of squatters occupied the [[Centro Financiero Confinanzas]], an unfinished economic complex originally intended to represent the country's economic growth.<ref>{{cite news|title=A 45-Story Walkup Beckons the Desperate|url=https://www.nytimes.com/2011/03/01/world/americas/01venezuela.html?pagewanted=all&_r=0|access-date=15 December 2013|newspaper=The New York Times|date=28 February 2011|first1=Simon|last1=Romero}}</ref>

The Venezuelan economy contracted by 5.8% in the first quarter of 2010 compared to the same period in 2009<ref name="businessweek.com">Toothaker, Christopher. [https://web.archive.org/web/20121025064529/http://www.businessweek.com/ap/financialnews/D9HFHLG00.htm "Chavez: Venezuela's economy soon to recover"]. Bloomberg Businessweek. 8 August 2010. Retrieved 3 September 2010.</ref> and recorded the highest inflation rate in [[Latin America]] at 30.5%.<ref name="businessweek.com" /> President Chávez expressed optimism about Venezuela's recovery,<ref name="businessweek.com" /> although the [[International Monetary Fund]] (IMF) projected that Venezuela would be the only country in the region to remain in recession that year. <ref>Cancel, Daniel. [https://www.bloomberg.com/news/2010-08-08/chavez-says-venezuelan-economy-is-already-recovering-following-recession.html "Chavez Says Venezuela's Economy Is `Already Recovering' Amid Recession."] Bloomberg. 8 August 2010. Retrieved 3 September 2010.</ref> The IMF described Venezuela's economic recovery as "delayed and weak" compared to other countries in the region.<ref name="eluniversal.com">{{in lang|es}}[http://www.eluniversal.com/2010/04/21/eco_ava_fmi:-venezuela-unico_21A3774771.shtml "FMI: Venezuela único país cuya economía se contraerá este año"]. El Universal. 21 April 2010. Retrieved 3 September 2010.</ref> 

Nevertheless, the Venezuelan economy resumed a growth trend in subsequent years, continuing until 2012.<ref>{{Cite web |title=Venezuela - Gross domestic product (GDP) 2025 |url=https://www.statista.com/statistics/370937/gross-domestic-product-gdp-in-venezuela/ |access-date=2024-12-17 |website=Statista |language=en}}</ref> The economic downturn began during [[Nicolás Maduro]]'s leadership, as Chávez’s health declined and he became increasingly unable to govern effectively.<ref name=":15" />

=== 2013–2020 ===
{{main|Crisis in Venezuela|2013–present economic crisis in Venezuela|Hyperinflation in Venezuela}}

[[File:Venezuela Shortages 2014.png|thumb|left|[[Shortages in Venezuela]] leave store shelves empty]]

According to the [[Misery index (economics)|misery index]] in 2013, Venezuela ranked as the top spot globally with the highest misery index score.<ref>{{cite web|last=Hanke|first=John H.|title=Measuring Misery around the World|url=http://www.cato.org/publications/commentary/measuring-misery-around-world|publisher=The Cato Institute|access-date=30 April 2014}}</ref><ref name="Hanke">{{cite web|title=Steve H. Hanke|url=http://www.cato.org/people/steve-hanke|website=Cato Institute|access-date=1 July 2015}}</ref> The [[International Finance Corporation]] ranked Venezuela one of the lowest countries for doing business with, ranking it 180 of 185 countries for its ''Doing Business 2013'' report with protecting investors and taxes being its worst rankings.<ref name="World Bank and International Financial Corporation">{{cite web|title=Ease of Doing Business in Venezuela, RB|url=http://www.doingbusiness.org/data/exploreeconomies/venezuela/|access-date=21 November 2015}}</ref><ref>{{cite web|title=Doing Business 2013 |url=http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB13-full-report.pdf |work=Report |publisher=International Finance Corporation |access-date=1 April 2014 |url-status=dead |archive-url=https://web.archive.org/web/20140530031102/http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB13-full-report.pdf |archive-date=30 May 2014}}</ref> In early 2013, the bolívar fuerte was devalued due to growing [[shortages in Venezuela]].<ref>{{cite news|title=Venezuela Slashes Currency Value|url=https://www.wsj.com/news/articles/SB10001424127887323951904578292383059267360|access-date=14 December 2013|newspaper=The Wall Street Journal|date=9 February 2013|archive-url=https://web.archive.org/web/20151016050959/http://www.wsj.com/news/articles/SB10001424127887323951904578292383059267360|archive-date=16 October 2015|url-status=dead}}</ref> The shortages included necessities such as toilet paper, milk and flour.<ref>{{cite news|last=Lopez|first=Virginia|title=Venezuela food shortages: 'No one can explain why a rich country has no food'|url=https://www.theguardian.com/global-development/poverty-matters/2013/sep/26/venezuela-food-shortages-rich-country-cia|access-date=14 December 2013|newspaper=The Guardian|date=26 September 2013}}</ref> Shortages also affected healthcare in Venezuela, with the [[University of Caracas Medical Hospital]] ceasing to perform surgeries due to the lack of supplies in 2014.<ref>{{cite news|title=Médicos del Hospital Universitario de Caracas suspenden cirugías por falta de insumos |url=http://globovision.com/articulo/medicos-del-hospital-universitario-paralizan-procedimientos-quirurgicos-tras-falta-de-insumos |access-date=21 February 2014 |newspaper=Globovision |date=21 February 2014 |url-status=dead |archive-url=https://web.archive.org/web/20140228074857/http://globovision.com/articulo/medicos-del-hospital-universitario-paralizan-procedimientos-quirurgicos-tras-falta-de-insumos |archive-date=28 February 2014}}</ref> The Bolivarian government's policies also made it difficult to import drugs and other medical supplies.<ref>{{cite news|title=Latin America's weakest economies are reaching breaking-point|newspaper=The Economist|date=1 February 2014}}</ref> Due to such complications, many Venezuelans died avoidable deaths with medical professionals having to use limited resources using methods that were replaced decades ago.<ref name="BGapril2015">{{cite news|title=Venezuela's medical crisis requires world's attention|url=https://www.bostonglobe.com/opinion/editorials/2015/04/28/medical-crisis-venezuela-requires-world-attention/EAgdzuzc9WebDGCZ0QY8GI/story.html|access-date=17 May 2015|agency=[[The Boston Globe]]|date=28 April 2015}}</ref><ref>{{cite news|title=Doctors say Venezuela's health care in collapse |url=http://bigstory.ap.org/article/doctors-say-venezuelas-health-care-collapse |access-date=22 February 2014 |newspaper=Associated Press |url-status=dead |archive-url=https://web.archive.org/web/20140226055123/http://bigstory.ap.org/article/doctors-say-venezuelas-health-care-collapse |archive-date=26 February 2014}}</ref>

[[File:Marcha hacia el Palacio de Justicia de Maracaibo - Venezuela 16.jpg|thumb|An opposition protester during the [[2014 Venezuelan protests]] holding a sign saying: "I protest for the scarcity. Where can we get these?"]]
In 2014, Venezuela entered an economic recession having its GDP growth decline to −3.0%.<ref name="WBgdp">{{cite web|title=Country and region specific forecasts and data|url=http://www.worldbank.org/en/publication/global-economic-prospects/data?variable=NYGDPMKTPKDZ&region=LAC|website=[[World Bank]]|access-date=15 March 2015}}</ref> Venezuela was placed at the top of the misery index for the second year in a row.<ref>{{cite news|title=Amid Rationing, Venezuela Takes The Misery Crown|url=http://news.investors.com/ibd-editorials/082614-714879-amid-food-rationing-and-shortages-venezuela-takes-the-misery-crown.htm|access-date=1 September 2014|work=Investors Business Daily}}</ref> ''[[The Economist]]'' said Venezuela was "probably the world's worst-managed economy".<ref name="ECONsept20">{{cite news|title=Venezuela's economy of oil and coconut water Probably the world's worst-managed economy|url=https://www.economist.com/news/americas/21618782-probably-worlds-worst-managed-economy-oil-and-coconut-water|access-date=21 September 2014|agency=The Economist|date=20 September 2014}}</ref> [[Citibank]] believed that "the economy has little prospect of improvement" and that the state of the Venezuelan economy was a "disaster".<ref name="CITImay2014">{{cite news|title=Citi considera que la economía venezolana es un "desastre"|url=http://www.eluniversal.com/economia/140503/citi-considera-que-la-economia-venezolana-es-un-desastre|access-date=5 May 2014|newspaper=El Universal|date=3 May 2014}}</ref> The ''Doing Business 2014'' report by the International Finance Corporation and the [[World Bank]] ranked Venezuela one score lower than the previous year, then 181 out of 185.<ref name="DB2014">{{cite web|title=Doing Business 2014|url=http://www.doingbusiness.org/reports/global-reports/~/media/giawb/doing%20business/documents/profiles/country/VEN.pdf|publisher=The World Bank|access-date=3 July 2014|archive-url=https://web.archive.org/web/20140714150720/http://www.doingbusiness.org/reports/global-reports/~/media/giawb/doing%20business/documents/profiles/country/VEN.pdf|archive-date=14 July 2014|url-status=dead}}</ref> The Heritage Foundation ranked Venezuela 175th out of 178 countries in economic freedom for 2014, classifying it as a "repressed" economy according to the principles the foundation advocates.<ref name="Heritage">{{cite web|title=The Heritage Foundation|url=http://www.heritage.org/about|archive-url=https://web.archive.org/web/20020824173456/http://www.heritage.org/about/|url-status=unfit|archive-date=24 August 2002|website=About Heritage|access-date=1 July 2015}}</ref><ref>{{cite web|title=Country Rankings: World & Global Economy Rankings on Economic Freedom|url=http://www.heritage.org/index/ranking|archive-url=https://web.archive.org/web/20101117114939/http://www.heritage.org/Index/ranking|url-status=unfit|archive-date=17 November 2010|publisher=The Heritage Foundation|access-date=26 March 2014}}</ref> According to ''[[Foreign Policy (magazine)|Foreign Policy]]'', Venezuela was ranked last in the world on its Base Yield Index due to low returns that investors receive when investing in Venezuela.<ref>{{cite news|last1=Yapur|first1=Nicolle|title=Políticas económicas en Venezuela ahuyentan el capital extranjero|url=http://www.el-nacional.com/economia/Politicas-economicas-Venezuela-ahuyentan-extranjero_0_436156503.html|access-date=3 July 2014|agency=El Nacional|date=30 June 2014|url-status=dead|archive-url=https://web.archive.org/web/20140703095927/http://www.el-nacional.com/economia/Politicas-economicas-Venezuela-ahuyentan-extranjero_0_436156503.html|archive-date=3 July 2014}}</ref> In a 2014 report titled ''Scariest Places on the Business Frontiers'' by [[Zurich Financial Services]] and reported by ''[[Bloomberg News|Bloomberg]]'', Venezuela was ranked as the [[Risk assessment|riskiest]] [[emerging market]] in the world.<ref>{{cite news|title=Scariest Places on the Business Frontiers|url=https://www.bloomberg.com/native/article/?mvi=e024180f4757442c9fa9873a54f048df#!/|access-date=12 July 2014|agency=Bloomberg|date=2 July 2014}}</ref> Many companies such as [[Toyota]], [[Ford Motor Co.]], [[General Motors Company]], [[Air Canada]], [[Air Europa]], [[American Airlines]], [[Copa Airlines]], [[TAME]], [[TAP Airlines]] and [[United Airlines]] slowed or stopped operation due to the lack of hard currency in the country,<ref>{{cite news|last=Hagiwara|first=Yuki|title=Toyota Halts Venezuela Production as Car Sales Fall|url=https://www.bloomberg.com/news/2014-02-07/toyota-halts-venezuela-production-as-car-sales-fall.html|access-date=8 February 2014|newspaper=Bloomberg|date=7 February 2014}}</ref><ref>{{cite news|title=Ford Cutting Production in Venezuela on Growing Dollar Shortage|url=http://www.businessweek.com/news/2014-01-14/ford-reducing-production-in-venezuela-on-growing-dollar-shortage|archive-url=https://archive.today/20140115074140/http://www.businessweek.com/news/2014-01-14/ford-reducing-production-in-venezuela-on-growing-dollar-shortage|url-status=dead|archive-date=15 January 2014|access-date=15 January 2014|newspaper=Businessweek|date=14 January 2014}}</ref><ref>{{cite news|last=Deniz|first=Roberto|title=General Motors sees no resolution to operations in Venezuela|url=http://english.eluniversal.com/economia/140207/general-motors-sees-no-resolution-to-operations-in-venezuela|access-date=8 February 2014|newspaper=El Universal|date=7 February 2014|url-status=dead|archive-url=https://web.archive.org/web/20140221204559/http://english.eluniversal.com/economia/140207/general-motors-sees-no-resolution-to-operations-in-venezuela|archive-date=21 February 2014}}</ref><ref>{{cite news|last=Mogollon|first=Mery|title=Venezuela sees more airlines suspend ticket sales, demand payment|url=http://www.latimes.com/world/worldnow/la-fg-wn-venezuela-airlines-ticket-sales-20140124,0,2603008.story?track=rss#axzz2rSnaDRL1|access-date=25 January 2014|newspaper=Los Angeles Times|date=24 January 2014}}</ref><ref>{{cite news|last=Wilson|first=Peter|title=Airlines keep cutting off Venezuelans from tickets|url=https://www.usatoday.com/story/news/world/2014/01/24/venezuela-airlines-suspend-ticket-sales/4826171/|access-date=25 January 2014|newspaper=USA Today|date=24 January 2014}}</ref> with Venezuela owing such foreign companies billions of dollars.<ref>{{cite news|last=Wilson|first=Peter|title=Venezuelans blocked from buying flights out|url=https://www.usatoday.com/story/news/world/2014/01/10/venezuela-airline-cancellations-europa/4405109/|access-date=15 January 2014|newspaper=USA Today|date=10 January 2014}}</ref> Venezuela also dismantled CADIVI, a government body in charge of currency exchange. CADIVI was known for holding money from the private sector and was suspected to be corrupt.<ref name="Venezuela Shuffles Economic Team">{{cite news|title=Venezuela Shuffles Economic Team|url=https://www.wsj.com/news/articles/SB10001424052702304149404579323303109294542?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304149404579323303109294542.html|access-date=16 January 2014|newspaper=The Wall Street Journal|date=15 January 2014|archive-url=https://web.archive.org/web/20150702114233/http://www.wsj.com/news/articles/SB10001424052702304149404579323303109294542?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304149404579323303109294542.html|archive-date=2 July 2015|url-status=dead}}</ref>

[[File:-ElinformadorTV- La pobreza obliga a la gente a comer de la basura -Barquisimeto por @graficohermes.webm|thumb|left|Venezuelans eating from garbage in late 2015]]Venezuela again topped the misery index according to the World Bank in 2015.<ref>{{cite news|last1=Anderson|first1=Elizabeth|title=Which are the 15 most miserable countries in the world?|url=https://www.telegraph.co.uk/finance/economics/11446325/Which-are-the-15-most-miserable-countries-in-the-world.html |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/finance/economics/11446325/Which-are-the-15-most-miserable-countries-in-the-world.html |archive-date=12 January 2022 |url-access=subscription |url-status=live|access-date=4 March 2015|agency=The Telegraph|date=3 March 2015}}{{cbignore}}</ref><ref name="BLOOMmarzo2">{{cite news|last1=Saraiva|first1=A Catarina|last2=Jamrisko|first2=Michelle|last3=Fonseca Tartar|first3=Andre|title=The 15 Most Miserable Economies in the World|url=https://www.bloomberg.com/news/articles/2015-03-02/the-15-most-miserable-economies-in-the-world|access-date=4 March 2015|agency=Bloomberg|date=2 March 2015}}</ref> The IMF predicted in October 2015 an inflation rate of 159% for the year 2015—the highest rate in Venezuelan history and the highest rate in the world—and that the economy would contract by 10%.<ref name="FPblackbox" /><ref name="BBCEconomy">{{cite news|last1=Gallas|first1=Daniel|title=Venezuela: Economy on the brink?|url=https://www.bbc.co.uk/news/world-latin-america-34983467|access-date=7 December 2015|publisher=BBC News Latin America|date=7 December 2015}}</ref> According to leaked documents from the Central Bank of Venezuela, the country ended 2015 with an inflation rate of 270% and a shortage rate of goods over 70%.<ref name="2015INFLATION1">{{cite news|last1=Lopez|first1=Virginia|title=Venezuela's economic crisis worsens as oil prices fall|url=http://www.aljazeera.com/news/2016/01/venezuela-economic-crisis-worsens-oil-prices-fall-160108105010345.html|access-date=8 January 2016|work=aljazeera.com|agency=[[Al Jazeera Media Network|Al Jazeera]]|date=8 January 2016}}</ref><ref name="2015INFLATION2">{{cite news|last1=Lozano|first1=Daniel|title=Ni un paso atrás: Maduro insiste con su receta económica|url=http://www.lanacion.com.ar/1860362-ni-un-paso-atras-maduro-insiste-con-su-receta-economica|access-date=8 January 2016|work=lanacion.com.ar|agency=[[La Nación]]|date=8 January 2015|archive-date=10 January 2016|archive-url=https://web.archive.org/web/20160110112054/http://www.lanacion.com.ar/1860362-ni-un-paso-atras-maduro-insiste-con-su-receta-economica|url-status=dead}}</ref>

President [[Nicolás Maduro]] reorganized his economic cabinet in 2016 with the group mainly consisting of leftist Venezuelan academics.<ref name="ENboaJAN2016">{{cite news|title=Bank of America prevé más controles para la economía de Venezuela|url=http://www.el-nacional.com/economia/Bank-Of-America-controles-Venezuela_0_774522570.html|access-date=14 January 2016|work=[[El Nacional (Caracas)|El Nacional]]|date=13 January 2016}}</ref> According to Bank of America's investment division [[Merrill Lynch]], Maduro's new cabinet was expected to tighten currency and price controls in the country.<ref name="ENboaJAN2016" /> Alejandro Werner, the head of IMF's Latin American Department, stated that 2015 figures released by the Central Bank of Venezuela were not accurate and that Venezuela's inflation for 2015 was 275%. Other forecast inflation figures by IMF and Bank of America were 720%<ref>{{cite news|url=https://www.nytimes.com/aponline/2016/01/22/world/americas/ap-lt-venezuela-economy-.html?_r=0|title=IMF: Venezuela Inflation to Surpass 700 Percent|date=22 January 2016|work=[[The New York Times]]|access-date=22 January 2016}}</ref><ref>{{cite news|url=http://www.el-nacional.com/economia/FMI-Inflacion-Venezuela_0_776922332.html|title=FMI: Inflación de Venezuela en 2016 será de 500%|date=17 January 2015|access-date=20 January 2016|agency=[[El Nacional (Caracas)|El Nacional]]}}</ref> and 1,000% in 2016,<ref name="PRI2016">{{cite news|url=http://www.pri.org/stories/2016-01-26/whats-it-under-1000-percent-inflation-venezuela-about-find-out|title=What's it like under 1,000 percent inflation? Venezuela is about to find out.|last1=Leff|first1=Alex|date=26 January 2016|access-date=28 January 2016|agency=[[Public Radio International]]}}</ref><ref>{{Cite book|url=https://www.imf.org/external/pubs/ft/weo/2016/01/pdf/text.pdf|title=World Economic Outlook|year=2016|publisher=International Monetary Fund |isbn=978-1-47554-372-8|access-date=29 May 2016}}</ref> Analysts believed that the Venezuelan government has been manipulating economic statistics, especially since they did not report adequate data since late 2014.<ref name="PRI2016" /> According to economist [[Steve Hanke]] of [[Johns Hopkins University]], the Central Bank of Venezuela delayed the release of statistics and lied about figures much like the [[Soviet Union]] did, with Hanke saying that a lie coefficient had to be used to observe Venezuela's economic data.<ref>{{cite news|last1=Hanke|first1=Steve H.|title=Venezuela's Lying Statistics|url=http://www.huffingtonpost.com/steve-h-hanke/venezuelas-lying-statisti_b_8993866.html|access-date=20 January 2016|agency=[[HuffPost]]|date=15 January 2016}}</ref>

By 2016, media outlets said that [[Venezuelan Economic Collapse of 2016|Venezuela was suffering an economic collapse]]<ref>{{cite web|url=https://www.nytimes.com/2016/11/25/world/americas/hungry-venezuelans-flee-in-boats-to-escape-economic-collapse.html|title=Hungry Venezuelans Flee in Boats to Escape Economic Collapse|date=25 November 2016|work=The New York Times}}</ref><ref>{{cite web|url=https://www.pbs.org/newshour/bb/venezuelans-face-collapsing-economy-starvation-and-crime/|title=Venezuelans face collapsing economy, starvation and crime|website=[[PBS]] |date=21 June 2016}}</ref> with the IMF saying that it expected it to reach a 500% inflation rate and 10% contraction in the GDP.<ref>{{Cite news|url=https://www.bbc.co.uk/news/magazine-38336054|title=Why you need sackfuls of banknotes to shop in Venezuela|date=2016-12-18|newspaper=BBC News|language=en|access-date=2016-12-19}}</ref> In December 2016, monthly inflation exceeded 50 percent for the 30th consecutive day, meaning the Venezuelan economy was officially experiencing [[hyperinflation]], making it the 57th country to be added to the Hanke-Krus World Hyperinflation Table.<ref>{{cite news|url=http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article120451593.html|title=Entering a 'world of economic chaos,' Venezuela struggles with hyperinflation|date= 12 December 2016|access-date=2016-12-19|author=Jim Wyss|newspaper=Miami Herald}}</ref>{{Multiple image
|align=right
|direction=vertical
|width=400
|image1=World Inflation rate 2017.svg
|caption1=In 2016, Venezuela had the highest annual inflation in the world
|image2=Venezuela_historic_inflation_index_and_oil_revenue.png
|caption2=Venezuela's historic inflation rate beside annual oil revenues.<ref>{{Cite web|url=http://www.bcv.org.ve/estadisticas/comercio-exterior|title=Comercio Exterior &#124; Banco Central de Venezuela|website=www.bcv.org.ve}}</ref><ref>[http://www.imf.org/external/pubs/ft/weo/2009/01/weodata/weorept.aspx?sy=1980&ey=2014&scsm=1&ssd=1&sort=country&ds=.&br=1&c=299&s=PCPI%2CPCPIPCH&grp=0&a=&pr1.x=55&pr1.y=5 International Monetary Fund: Data & Statistics] (1980–2008, 2015)</ref><ref>[https://www.cia.gov/the-world-factbook/countries/venezuela/ CIA: The World Factbook] (2009–2014)</ref> This chart is in a logarithmic scale.
}}On 25 August 2017, it was reported that new United States sanctions against Venezuela did not ban trading of the country's existing non-government bonds, with the sanctions instead including restrictions intended to block the government's ability to fund itself.<ref name=WS>{{Citation |last=Cui |first=Carolyn |date=25 August 2017 |title=Venezuelan Bonds Up After New U.S. Sanctions Spare Debt Trading|newspaper=The Wall Street Journal |url=https://www.wsj.com/articles/venezuelan-bonds-up-after-new-u-s-sanctions-spare-debt-trading-1503680452}}</ref>

On 26 January 2018, the government ended the protected, subsidized fixed exchange rate mechanism that was highly overvalued as a result of rampant inflation.<ref>{{cite news|url=https://www.reuters.com/article/us-venezuela-economy/venezuela-eliminates-heavily-subsidized-dipro-forex-rate-idUSKBN1FJ040|title=Venezuela eliminates heavily subsidized DIPRO forex rate|date=30 January 2018|work=Reuters|access-date=30 January 2018}}</ref> The [[National Assembly (Venezuela)|National Assembly]] (led by the opposition) said inflation in 2017 was over 4,000%, a level other independent economists also agreed with.<ref name=":1">{{cite news|url=https://www.reuters.com/article/us-venezuela-food/venezuelans-report-big-weight-losses-in-2017-as-hunger-hits-idUSKCN1G52HA|title=Venezuelans report big weight losses in 2017 as hunger hits|last=Sequera|first=Vivian|date=18 February 2018|work=Reuters|access-date=23 February 2018}}</ref> In February, the government launched an oil-backed [[cryptocurrency]] called the [[Petro (cryptocurrency)|petro]].<ref name=launch>{{cite news|url=https://www.washingtonpost.com/news/worldviews/wp/2018/02/20/venezuela-launches-the-petro-its-cryptocurrency/|title=Venezuela launches the 'petro,' its cryptocurrency|first=Rachelle|last=Krygier|date=20 February 2018|newspaper=The Washington Post|access-date=22 March 2018}}</ref>

[[Bloomberg L.P.|Bloomberg]]'s [[Cafe Con Leche Index]] calculated the price increase for a cup of coffee to have increased by 718% in the 12 weeks before 18 January 2018, an annualized inflation rate of 448,000%.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2018-01-18/venezuelan-hyperinflation-explodes-soaring-over-440-000-percent|title=Venezuelan Hyperinflation Explodes, Soaring Over 440,000 Percent|date=18 January 2018|work=Bloomberg|access-date=7 March 2018}}</ref> The finance commission of the National Assembly noted in July 2018 that prices were doubling every 28 days with an annualized inflation rate of 25,000%.<ref>{{cite news|url=https://www.thetimes.com/world/latin-america/article/venezuela-suffering-25-000-inflation-5hvcz8g58|title=Venezuela suffering 25,000% inflation|last=Caracas|first=Stephen Gibbs|date=12 June 2018|work=The Times|access-date=23 July 2018|issn=0140-0460|url-access=subscription }}</ref>

The country was heading for a [[Sovereign default|selective default]] in 2017.<ref>[http://www.dw.com/en/russia-extends-lifeline-as-venezuela-struggles-with-selective-default/a-41402510 "Russia extends lifeline as Venezuela struggles with 'selective default'"].</ref> In early 2018, the country was in [[Default (finance)|default]], meaning it could not pay its lenders.<ref>[http://www.miamiherald.com/latest-news/article210820589.html "Venezuela oil assets seizure by Conoco may start wave"].</ref>

On 24 August 2017 President Trump imposed sanctions on the state debt of Venezuela which ban to make transactions with state debt of Venezuela including the participation in debt restructuring.
On 13 November 2017 the technical default period ended and Venezuela did not pay coupons on its dollar eurobonds. This caused a cross default on other dollar bonds. On 30 November ISDA committee consisting of 15 biggest banks admitted default on state debt obligations what in its turn entailed payments on CDS.<ref>{{Cite web|url=http://cbonds.com/organizations/docdownload/8887|title=Final List of Deliverable Obligations for the 2017 Bolivarian Republic of Venezuela Credit Derivatives Auction Settlement Terms|website=www.cbonds.com|access-date=2019-01-25|archive-date=25 January 2019|archive-url=https://web.archive.org/web/20190125183602/http://cbonds.com/organizations/docdownload/8887|url-status=dead}}</ref> According to [[Cbonds]], nowadays there are 20 international Venezuelan bonds which are recognized in default. The overall amount of defaulted obligations is equal to 36 billion dollars.<ref>{{Cite web|url=http://cbonds.com/countries/Venezuela-bond|title=Venezuela: bonds|website=www.cbonds.com|access-date=2019-01-25}}</ref>