Venezuela is a country that is levered to the price of oil. This means that when the price of oil drops, the overall tax revenue coming into the country goes down as well. After many years of socialist rule, Venezuela is starting to reap the rewards of bad government. The price of oil started to decline in late 2014. Since then, crude oil has gone all the way to below $30 a barrel. Even though the price of oil is higher now, countries like Venezuela are still having trouble with their obligations. Going forward, it will be interesting to see whether the economy can sustain itself.
The national debt of Venezuela has been increasing since the price of oil has dropped. There are a lot of people who are interested in how long the country can last at its current pace. The problem is that oil production is up throughout the world. The longer that oil stays low, the more deficits the country will run. During this time, the national debt will continue to increase. There are several ways that low oil prices hurt Venezuela.
- Lower Tax Revenues
- Higher Debt
- Higher Interest on Current Payments
- Lack of Foreign Investment
The current economic situation is simply not sustainable for the country. Over the next few months, many people living in the area are really hoping that something will change quickly.
Many people living in Venezuela have had enough of their current government. There are a lot of people who are interested in new leadership, but the problems of the current administration hang over their head. Riots are now common in the country. These riots are not over, and many people expect the situation to get worse. Even though the economy in the United States is not booming, it is much better than the current situation in Venezuela.
Future oil prices
The price of oil has taken a huge hit in recent days. There is currently talk that Great Britain could leave the European Union. If this does happen, it is a major blow to the confederation of nations from Europe. This is one of the biggest economic entities in the world, and European banks are nervous. The higher the volatility in the world's economy, the worse the situation is for Venezuela. #Donald Trump #World Politics #Foreign Affairs