External funding dried up as the economy collapsed, pushing the current account roughly into balance. Import compression was unavoidable as exports fell. External deficits are not the issue, unlike past EM crises.
We assess Venezuela’s macroeconomic fundamentals after years of policy mismanagement and social turmoil. The GDP drop is on par with the Soviet Union’s collapse.
In our last edition of Sticky Notes in 2018, we look at President Xi's reform anniversary speech, Venezuela's future, NAFTA termination, oil markets, and a potential U.S. government shutdown.