Venezuelan flags stand on display at the Supreme Court in Caracas, Venezuela. (Photographer: Carlos Becerra/Bloomberg)

Early Figures Show Venezuela Economy Fell 16.6 Percent in 2017

(Bloomberg) -- Preliminary figures compiled by Venezuela’s central bank indicate that the crisis-wracked nation’s economy contracted 16.6 percent in 2017, according to two people with direct knowledge of the estimates.

For the first time since 2016, the bank is preparing a raft of macroeconomic indicators for the International Monetary Fund to avoid sanctions including a possible expulsion from the lender. Bank technicians began working extended shifts and weekends earlier this month to deliver new growth and inflation data and meet a strict Nov. 30 deadline issued by IMF officials.

The preliminary data points to the fourth straight year of contraction for the oil-rich nation that’s been slammed by gross mismanagement, a breakdown of public services and wide-scale hunger. Economists have been left to guess on the exact depth of the crash, as the government maintains a near blackout on official statistics including homicides, inflation, and HIV rates.

Indicators such as inflation were being handled directly by the bank’s directors, the people said. A spokesperson from Venezuela’s central bank declined to comment on the figures.

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, according to estimates from the IMF’s most recent World Economic Outlook report.

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 at the time, adding it would reconvene in six months to review the country’s progress.

Analysts say expulsion from the IMF would cause Venezuela to lose access to what little remaining funds it has associated with the lender and could also trigger a cross-default on some sovereign bonds.

©2018 Bloomberg L.P.