Economic adjustments on hold in the current state of affairs
Experts change their minds_ about impending devaluation
Venezuelan President Hugo Chávez's report on a new surgery and hinting the possibility of his disability shifts not only the political scenery, but also economic prospects. In the light of the significant fiscal deficit and pressure on foreign exchange, experts had deemed devaluation as imminent. Now, though, the situation is not so clear.
The very Venezuelan leader made an appeal to vote his Vice-President and Foreign Minister Nicolás Maduro, in the event of new election associated to his potential total absence.
"Elect Nicolás Maduro as president. I ask you from the bottom of my heart," Chávez said on Saturday evening.
Sure enough, there is the possibility of a new election where the government would bet on its stay in office. Such scenario makes Asdrúbal Oliveros, the director of think tank Ecoanalítica, revise the forecasts for early 2013.
The economist fears that the economic issue will remain in the second place. As a result, he is afraid that no adjustments will be made soon, as previously thought.
"Any economic decision will be based on a strict political calculation and anticipating the effects on Chavezism in the future," Oliveros said.
Therefore, notwithstanding the fiscal deficit, estimated at 15% of the Gross Domestic Product (GDP), and growing restrictions and pressure on the foreign currency market, the analyst thinks that any change in the fields of taxes, subsidies or foreign exchange will remain on standby.
"You cannot run for election in the middle of (economic) adjustments," he pronounced.
Cristian Fonseca, a businessman in La Candelaria district downtown Caracas, was doing the accounts in his small shop office on Sunday December 21, 2008. The Christmas shopping season kept him working late hours into the night. It was around 11 p.m. and his phone rang. A friend broke the bad news to him over the telephone.