UNDP upgrades 2024 growth for Venezuela to 6.1%

The United Nations Development Programme has upgraded its growth forecast for Venezuela this year, in its Second Quarter report published on 7 October.

The UN agency said that GDP will grow by 6.1% in 2024, while on 28 June it projected 4.2%. The revision contrasts with the analysis of many economists, who believe growth will stall without General License 44 and after an election marred by accusations of fraud.

There are fears of tighter economic sanctions, while Venezuela has broken relations with Latin American neighbours since the vote. Panama and the Dominican Republic were important transport hubs for Venezuelan people and businesses.

The main driver of growth will be the oil sector, as both volumes and prices are expected to be higher than last year, increasing revenues, according to the UNDP.

In the report, oil revenues are estimated to be 49% higher in the first half of 2024, compared to the same period last year, reaching $8 billion. This trend will rely on the global market and a flexibilisation of US sanctions.

Trade flowing to and from the US continues to grow. Exports from Venezuela between January and May 2024 grew by 82.4% to the same period last year, and imports from the US by 63.8%.

Inflation is also projected to keep cooling down, and the average rate could end up being 46% this year. This would be the lowest

Aggregate demand would grow faster than expected in the previous report, by 8%. Private consumption would grow by 5.9%, public sector expenditures by 1.9%, and fixed capital formation by 15.8%.

Notably, public sector expenditures were previously forecast to grow by 6.2%, considering that this is an electoral year. As the time for campaigning is over, the government continues to double down on suppressing inflation as its priority.