Caracas’ package of economic reforms centred on a massive currency devaluation will worsen Venezuela’s dire financial predicament, economists warn. The measures fail to establish the conditions necessary to revive upstream investment and are likely to result in further declines in the country’s teetering crude production and exports, which account for nearly all state revenues, they say. “This will not solve anything as long as the key issue of the large publicsector deficits financed by monetisation is not addressed,” a foreign-based economist says. “The large depreciation of the official exchange rate should eventually contribute to more hyperinflation.”
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