Events in Venezuela
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Venezuela is one of the largest producers of oil in the world. The country has a history of supplying oil to various nations through tough economic times. Earlier this year, the price of oil dropped to a multi-year low. Venezuela takes on debt in order to maintain high rates of spending. High oil prices are needed in order to sustain the overall economy. But, as reported by Slideshare on the current economic environment, Venezuela is having trouble making debt payments.
The Economy of Venezuela
Venezuela achieved a high rate of growth for many years as oil production increased. The government decided to spend as much money as possible on infrastructure in order to keep economic growth high. During that time, the overall government debt continued to build. The system was held up by high oil prices explained analyst Osio, and no one worried about a collapse in oil. However, now that the collapse occurred, there are a lot of people worried about the solvency of the country. The economy of Venezuela is based primarily off of the price of crude oil. If oil stays at its current level, the government will eventually have to slash spending to match oil prices. This is bad news for anyone living in Venezuela over the next couple of years. Major changes to government spending and strategy are needed in order to survive low oil prices.