Venezuela's asphyxiating economy will contract between 7 and 10 percent this year, the head of the country's main business chamber Fedecamaras has told Reuters. As David Pollard reports, few investors see any short-term solution to the crisis either.
Venezuela's new Constituent Assembly has its fans. The all-powerful new body will, they say, legislate for peace and prosperity. But - made up entirely of allies of the ruling Socialist Party - others see it as a way to purge opposition. While many here are cheering, many others in this Latin American state aren't. (SOUNDBITE) (Spanish) CARLOS LARRAZABAL, FEDECAMARAS PRESIDENT, SAYING: "The Assembly was not chosen according to the constitution, and the fraud that's occurred is clear to see ... A profound change is needed in the political model." And - says the head of the country's main business association - after years of Socialist rule, change is needed in the economic model too. (SOUNDBITE) (Spanish) CARLOS LARRAZABAL, FEDECAMARAS PRESIDENT, SAYING: "All the indicators point to growth falling between 7 percent and 10 percent. That's a serious figure." Add that to the drop of the previous three years, and it could come to 30 per cent or more. In other words, a faster fall than the US after the Wall Street crash. 125 people died in the recent political unrest - but Venezuela now also faces a threat from abroad. Washington extending its punitive sanctions on Wednesday against Socialist officials. Last week, even targetting President Maduro himself. Though so far not Venezuela's vital - but ailing - oil industry. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "For years Venezuela had excellent oil revenues and did nothing to build a fundamentally strong economy that could cope in an environment of much lower oil prices. Without that fundamental structure, Venezuela now finds itself hideously hostage both to the oil price but also to global opinion." And if the sanctions might make the current US president unpopular here, certain other US presidents are still in huge demand.... At least when they're printed on greenbacks. Triple-digit inflation putting foreign currency at a premium in a country whose economy, like its politics, is in turmoil.