Venezuela’s already struggling economy has been devastated by declining oil prices. In a recent article Jason Mitchell explained, “Venezuela has one of the worst managed economies on the planet and its bonds are trading at levels that suggest a default is priced in.” The country depends on oil revenues for more than 95% of its foreign income and its reserves have dwindled to $20 billion. Bondholders are increasingly worried that the country will fail to service its debt. According to Fernando Losada, an economist at AllianceBernstein, “the availability of macro and financial information on a timely basis is essential for figuring out where to put your money.” And in Venezuela, the challenges for investors and analysts are exacerbated by the reluctance of President Nicolas Maduro’s government to publish timely economic data.
Bank of America and Barclay’s have been forced to create their own ways of measuring Venezuela’s economic health. “We’ve had to build these series based on everything you can imagine,” Francisco Rodriguez, a Venezuela analyst at Bank of America, explained. “I feel like a private detective. You have to try to find the data. At least the police have power to gather evidence — I don’t have any,” he added.
It’s been five months since Venezuela published inflation data. The most recent figure of 68.5% is the highest in the world.
Barclays economist Alejandro Grisanti now estimates that Venezuelan inflation is over 100%. “Now it seems that President Maduro has changed this into a state policy of not publishing data,” he explained. Full article -> Forbes
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