Venezuela, Drained Of Oil Revenue, Goes To China, Iran & Russia For Funds

Venezuela is tinkering rather than tackling issues because it is boxed in by low oil prices, and the outlook remains dire. So says Nicholas Watson at Teneo Intelligence in comments on Venezuela President Nicolas Maduro’s Tuesday announcement that the government will cut spending by 20%. It also looks like the government will alter the foreign exchange system, Watson writes. But depressed oil prices leave little wiggling room for Venezuela: “… the price of Venezuelan crude on 2 December hit $63.40. Estimates vary, but it is thought that Venezuela loses between $620-750 million in revenues for every dollar drop in the oil price. This comes on top of a fiscal deficit in excess of 17% of GDP. This week’s visit by economy minister Rodolfo Marco Torres to China, Iran and Russia in search of fresh financing is highly unlikely to alter the problematic outlook for the economy, while the latest drive to push non-oil exports is too little too late. More…