Credit Suisse also projected a Gross Domestic Product (GDP) growth for 2023 of 8%, against a previous estimate of 3%.
“These are not typos. If we are accurate, this could end up being some of the strongest growth data globally in these years,” the bank said in the report dated April 6.
Venezuela’s economy bottomed out in 2020 and the new forecast is largely based on the expectation that oil GDP will rise by more than 20%, he added.
The South American country faced economic collapse for years and high inflation. Some economic sectors have had an oxygen after the government of the president Nicholas Maduro make controls on the economy more flexible, allowing greater foreign exchange transactions.
A high-level meeting between US and Venezuelan officials in Caracas in early March opened the doors to talks about a possible relaxation of the sanctions that Washington has imposed on the oil industry of the OPEC member country since 2019.
Credit Suisse pointed out that Venezuela could make up for the Russian oil shortfall, noting that the United States imported roughly 700,000 barrels per day (bpd) of oil products from Russia in 2021, while Venezuela’s oil export capacity last year was between 500,000 and 700,000 bpd.
“It seems feasible that with a relaxation of sanctions, the Venezuelan authorities could increase that number,” the bank said. “Suddenly, amid concerns about oil supply, some were reminded that the world’s supposed largest oil reserves are located in a country that is relatively not that far from the United States.”
The prospect of easing sanctions has prompted the state-owned Petróleos de Venezuela (PDVSA) and some foreign companies to take action in anticipation of higher crude exports. But the export data shows that PDVSA is still hampered by years of mismanagement and lack of basic maintenance of the infrastructure to produce, upgrade, refine, store and export oil.
Despite the recovery of some activities, local firms estimate that in 2022 growth will be lower than anticipated by Credit Suisse.
Source: Ambito
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