Venezuela's Contraction Likely Bottoming Out, Though Upside Very Limited

• The pace of Venezuela’s economic contraction will slow in 2021, as oil exports rise moderately and the government expands opportunities for the private sector in some sectors, though activity will remain a fraction of pre-2014 levels.
• Fitch Solutions forecasts Venezuela’s economy will contract 2.9% y-o-y in 2021, from a 26.6% contraction in 2020, with growth reaching positive territory in 2022.
• In the long term, it expects US sanctions will remain in place. Combined with the Venezuelan economy’s myriad other structural weaknesses, there is limited upside for economic activity moving forward.

(Source: Fitch Solutions)