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Quick Facts
- Population:
- GDP (PPP):
- $148.5 billion
- -20.4% 5-year compound annual growth
- $5,381 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
- Public Debt:
Venezuela’s economic freedom score is 25.8, making its economy the 174th freest in the 2023 Index. Its score has increased by 1.0 point since last year. Venezuela is ranked 31st out of 32 countries in the Americas region, and its overall score is much lower than the world and regional averages.
Venezuela remains economically repressed. Severely hampered by state interference, the formal economy is increasingly stagnant, and informal economic activity is expanding. Prices of almost all goods and services are controlled. Because of rampant corruption and the legal framework’s deficiencies, the rule of law remains fragile and uneven.
Background
Venezuela’s modern democratic era lasted from the end of military rule in 1959 until the election of Hugo Chávez in 1999. Nicolás Maduro completed the destruction of democracy and consolidated dictatorship in 2017. The deeply corrupt socialist regime’s policies led to one of history’s worst depressions and Latin America’s worst migration crises. The regime also bankrupted state-owned oil company PDVSA and engages in illicit trafficking. Following international censure of Maduro’s sham 2018 reelection, then-National Assembly head Juan Guaidó constitutionally challenged Maduro’s rule, but the regime still exercises de facto control. Iran, Russia, and China help Venezuela to circumvent U.S. sanctions.
Rule of Law
The overall rule of law is weak in Venezuela. The country’s property rights score is below the world average; its judicial effectiveness score is below the world average; and its government integrity score is below the world average.
Government Size
The top individual and corporate tax rates are 34 percent. The tax burden equals 14.4 percent of GDP. Three-year government spending and budget balance averages are, respectively, 12.9 percent and –6.5 percent of GDP. Public debt equals 240.5 percent of GDP.
Regulatory Efficiency
The overall freedom to engage in entrepreneurial activity is constrained by heavy government control and inconsistent enforcement of regulations. There is little decision-making transparency, and most contracts are awarded without competition. The labor market remains controlled by the state. Inflation has been very high.
Open Markets
The trade-weighted average tariff rate is 18.9 percent, and extensive nontariff barriers further distort trade flows. Private investment remains hampered by state interference in the economy, and threats of expropriation persist. The financial sector is tightly controlled by the state.