Moody's:[15] COutlook: stable The economy of Venezuela is based primarily on petroleum,[4][18] as the country holds the largest crude oil supply in the world.

[20] During the 21st century, under the leadership of socialist populist Hugo Chávez it saw great increase in GDP,[21] but under his successor Nicolás Maduro, the Venezuelan economy has collapsed, prompting millions of citizens to flee Venezuela.

[27] From the 1950s to the early 1980s, the Venezuelan economy experienced a steady growth that attracted many immigrants, with the nation enjoying the highest standard of living in Latin America.

Hugo Chavez became president in 1999 and implemented a form of socialism (the Bolivarian Revolution) that resulted in the collapse or nationalization of many Venezuelan businesses, and purged the state-run PDVSA oil company, replacing thousands of workers with political supporters with no technical expertise.

[29] Price controls and expropriation of numerous farmlands and various industries are government policies along with a near-total freeze on any access to foreign currency at reasonable "official" exchange rates.

Most Venezuelans live on just a few dollars a month, with the health care and education systems in total disrepair and biting shortages of electricity and fuel” as of 2024, according to VOA (report from AFP).

According to the report, drug, oil and gold trafficking, as well as illegal activities in ports and customs had generated over 9.4 billion dollars for organized crime protected by corrupt officials.

[52] Buoyed by a strong oil sector in the 1960s and 1970s, Venezuela's governments were able to maintain social harmony by spending fairly large amounts on public programs including health care, education, transport and food subsidies.

[53] The first tenure of Carlos Andrés Pérez from 1974 to 1979 benefited from the 1970s energy crisis, tripling the amount of public spending and nationalizing the oil industry, establishing PDVSA.

[62] Carlos Andrés Pérez based his campaign for the 1988 Venezuelan general election in his legacy of abundance during his first presidential period[63] and initially rejected liberalization policies.

[55][70][71][72][64][65] By late 1991, as part of the economic reforms, Carlos Andrés Pérez' administration had sold three banks, a shipyard, two sugar mills, an airline, a telephone company and a cell phone band, receiving a total of US$2,287 million.

[73] The most remarkable auction was CANTV's, a telecommunications company, which was sold at the price of US$1,885 million to the consortium composed of American AT&T International, General Telephone Electronic and the Venezuelan Electricidad de Caracas and Banco Mercantil.

[88] In response to pressures on the bolívar, declining international reserves, and the economic impact of the oil industry work stoppage, the Ministry of Finance and the central bank suspended foreign exchange trading on January 23, 2003.

[89] According to The Heritage Foundation and The Wall Street Journal, Venezuela had the weakest property rights in the world, scoring only 5.0 on a scale of 100, with expropriation without compensation being common.

Other forecast inflation figures by IMF and Bank of America were 720%[128][129] and 1,000% in 2016,[130][131] Analysts believed that the Venezuelan government has been manipulating economic statistics, especially since they did not report adequate data since late 2014.

On 30 November ISDA committee consisting of 15 biggest banks admitted default on state debt obligations what in its turn entailed payments on CDS.

In April 2000, Venezuela's president decreed a new mining law and regulations were adopted to encourage greater private sector participation in mineral extraction.

In 2014, General Motors Venezolana stopped automotive production after 65 years of service due to a lack of supplies[163][164] while the Central Bank of Venezuela announced that the shortage rate of new automobiles was at 100%.

[citation needed] Under Chávez, Venezuela has also instituted worker-run "co-management" initiatives in which workers' councils play a key role in the management of a plant or factory.

In experimental co-managed enterprises, such as the state-owned Alcasa factory, workers develop budgets and elect both managers and departmental delegates who work together with company executives on technical issues related to production.

Compounding such problems is a drought which the government says was caused by El Niño, resulting in rationing of water and electricity and a short supply of food.

[195] The Central Bank of Venezuela has stated that the recession is due largely "to restricted access to foreign currency for imports, lower internal demand and electricity rationing".

One of this sources claims that the disclosure of economic numbers may bring Venezuela into compliance with the IMF, making it harder to support Juan Guaidó during the presidential crisis.

As Venezuela printed more money for their social programs, the Bolívar continued to devalue for Venezuelan citizens and merchants since the government held the majority of the more reliable currencies.

Venezuela's largest food producing company, Empresas Polar, has stated that they may need to suspend some production for nearly the entire year of 2014 since they owe foreign suppliers $463 million.

The economic crisis since 2013 has greatly increased inequality since the heavily subsidized services that the poor rely on, such as public hospitals and food distribution, have experienced severe shortages of essential imported goods.

[59][223] Domestically, Chávez used such oil funds for populist policies, creating the Bolivarian missions, aimed at providing public services to improve economic, cultural and social conditions.

[236] However, shortages in Venezuela as a result of price control policies and heavy import dependence left the majority of Venezuelans without adequate products after his death.

[237][238] In 2008, Francisco Rodríguez of Wesleyan University in Connecticut and Daniel Ortega of IESA stated that there was "little evidence" of "statistically distinguishable effect on Venezuelan illiteracy" during the Chávez administration.

[104][241] Venezuela's reliance on imported goods and its complicated exchange rates initiated under Chávez led to increasing shortages during the late-2000s and into the 2010s that affected the availability of medicines and medical equipment in the country.