Evaluating Venezuela's Economic Crisis

Venezuela’s already struggling economy has been devastated by declining oil prices. In a recent article Jason Mitchell explained, “Venezuela has one of the worst managed economies on the planet and its bonds are trading at levels that suggest a default is priced in.” The country depends on oil revenues for more than 95% of its foreign income and its reserves have dwindled to $20 billion. Bondholders are increasingly worried that the country will fail to service its debt. According to Fernando Losada, an economist at AllianceBernstein, “the availability of macro and financial information on a timely basis is essential for figuring out where to put your money.” And in Venezuela, the challenges for investors and analysts are exacerbated by the reluctance of President Nicolas Maduro’s government to publish timely economic data.