Venezuela today
Venezuela's economy has been in a state of total collapse since 2013, resulting in a severe humanitarian crisis, a drastic decline in the standard of living, and a massive population exodus.
Venezuela has experienced one of the largest economic contractions in modern history for a non-conflict country, with its GDP falling by approximately 75-80% between 2013 and 2021.
The country endured a prolonged period of hyperinflation from 2014 to early 2024, which destroyed the purchasing power of salaries. Inflation has since moderated but remains high; the IMF has projected an annual inflation of around 60% for 2024 and over 250% for 2025.
The economy did experience modest GDP growth in 2022, 2023, and early 2024, driven by a rebound in oil prices, a partial easing of US sanctions, which were largely reimposed in 2024, and an informal dollarization of the economy. However, the IMF forecasts a contraction of 4% for 2025 due to renewed sanctions and political instability.
The economy remains heavily dependent on its oil reserves, the poor management of which, coupled with underinvestment and sanctions, has led to a drastic decline in production.
The standard of living has plummeted, with the decline in living standards estimated at a staggering 74% between 2013 and 2023. As of 2024, approximately 82% of the population lives in income-based poverty, with over 50% in extreme poverty. Most households cannot afford the basic monthly food basket, leading to widespread food insecurity.
There are acute and persistent shortages of essential services, including food, medicine, electricity, and water. In 2025, restrictions on access to drinking water affected some 62% of the population.
The healthcare system is in total disrepair, with shortages of medical supplies and personnel, and many hospitals lacking reliable access to safe water and electricity. The education system has also collapsed, with many children out of school and a mass exodus of qualified teachers.
The dire economic and humanitarian conditions have triggered one of the largest migration crises in modern history. Since 2014, an estimated over 7.7 million Venezuelans have fled the country. The total number of migrants is projected to reach around 8.4 million by 2025 in a baseline scenario.
The majority of migrants have settled in other Latin American and Caribbean countries, such as Colombia, Peru, Ecuador, and Chile, with others going to the United States and Spain. The exodus includes a significant number of skilled workers and professionals, contributing to a brain drain within Venezuela. The migration has placed a strain on social services in host countries but has also been noted to have potential long-term positive economic effects on those nations if migrants are successfully integrated into the formal economy.
Take a good look. This is Socialism. A country collapses into ruin because it tries to impose a system that ignores markets, the price mechanism, and basic human nature. Venezuela today, New York tomorrow?
Madsen Pirie