Country Economic Forecasts > Venezuela

We expect that GDP will fall by 8.6% this year and by a further 1.2% in 2017. Moreover, the outlook for next year is likely to worsen, as a solution to the current power struggle between the government and the opposition is not yet in sight.The National Electoral Council (CNE) has set 26, 27 and 28 October as the official dates for the collection of the 4 million signatures (20% of the electorate) required to activate a referendum for recalling President Maduro. This will allow the CNE to delay the referendum until after 10 January, beyond which date if a referendum takes place and Maduro is recalled, then the Vice President would take his place and 'Chavismo' would remain in power. In addition, the CNE has set conditions that will make it very difficult for the opposition to achieve the 20% requirement to trigger the referendum. The opposition will have to collect the signatures of 20% of all registered voters in each state (rather than nationally) in just 21 hours, using only a fraction of the voting centres available, and just four fingerprint scanners per centre.PDVSA has improved its recent swap offering of bonds maturing next year for a bond amortizing in four equal annual tranches beginning in Q4 2017 and collateralized by 50.1% of Citgo shares, with the swap capped to a maximum of US$5,235m.The improved swap offering saw PDVSA and Venezuelan bonds rally to a two-year high. The new improved deal should be sufficiently attractive to achieve at least a two-thirds participation rate in the swap, which would spare the country US$4.3bn in amortizations and interest payments over the next 12 months and probably be enough to avoid default.