Venezuela Central Bank Is Preparing Fresh Data for the IMF

(Bloomberg) -- Facing pressure from abroad and running out of cash, Venezuela’s central bank is preparing to hand over comprehensive economic statistics to the International Monetary Fund to avoid sanctions including potential expulsion from the lender, according to two people with direct knowledge of the matter.

Failing to deliver data to the IMF since 2016, the central bank has left Venezuela watchers guessing during years of economic meltdown, marked by rampant food shortages and spiraling consumer prices. Following a conference call between the bank and IMF officials last week, technicians at the central bank began working to deliver new growth and inflation data to meet a strict Nov. 30 deadline, said the people, who aren’t authorized to speak publicly on the matter.

Not complying with the deadline could result in various penalties including the loss of voting rights or a withdrawal from the fund. Asdrubal Oliveros, the director of the Caracas consultancy Econanalitica, said the risk of being booted from the IMF is pressuring President Nicolas Maduro’s administration to deliver data after years of refusing to reveal information.

Expulsion from the fund would cause Venezuela to lose access to what little remaining funds it has associated with the lender, but more importantly, it could trigger a cross-default on some sovereign bonds. “For many multinational companies here, this would be the straw that breaks the camel’s back,” Oliveros said.

Central bank employees are said to be working extended shifts to compile a backlog country indicators, particularly gross domestic product indicators, which are believed to be the most out of date.

On Thursday, Gerry Rice, the IMF’s Chief spokesperson, told reporters that the fund had been in contact with Venezuelan authorities regarding the lack of data, but the discussion was ongoing. “We’re hopeful it can lead to a productive outcome, but that will be something that’s presented to our executive board in due course and they will then discuss and make the final decision,” he said.

A spokesperson from Venezuela’s central bank declined to comment on the talks.

According to Bloomberg’s Cafe Con Leche Index, Venezuela’s annual inflation rate is now at 187,400 percent. Gross domestic product will shrink 18 percent in 2018, representing a third consecutive year of double-digit decline in GDP, according to estimates from the IMF’s most recent World Economic Outlook report. Venezuelan reserves stand at just $8.7 billion, down from a high of $42 billion in 2008.

While Venezuela often lambasted the IMF for its policy recommendations under former President Hugo Chavez and his successor Maduro, the central bank has repeatedly used special drawing rights held at the fund. Venezuela still has access to $52 million, which it has drawn down from $2.5 billion according to IMF data.

In May, the IMF’s executive board issued a declaration of censure against Venezuela for its failure to provide information. “Data provision was an essential first step to understanding Venezuela’s economic crisis and identifying possible solution,” the board said in a statement, adding it would reconvene in six months to review the country’s progress.

--With assistance from Andrew Mayeda.

To contact the reporters on this story: Andrew Rosati in Caracas at arosati3@bloomberg.net;Alex Vasquez in Caracas Office at avasquez45@bloomberg.net

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Patricia Laya

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