Venezuela’s economic descent (Updated) - The Indicator from Planet Money Recap

Podcast: The Indicator from Planet Money

Published: 2026-01-03

Duration: 10 minutes

Guests: Gabriela Sade, Jesus Palacios, Jennifer Onteveros

Summary

Venezuela's economy has been in turmoil for over a decade, plagued by hyperinflation and political instability. The U.S. recently intervened militarily, deposing Nicolás Maduro, prompting uncertainty about the country's future.

What Happened

Venezuela's economic crisis began under President Hugo Chavez, despite initial gains in education and poverty reduction. Chavez's policies of asset seizure and political suppression laid the groundwork for economic collapse, further exacerbated under Nicolás Maduro's rule. Hyperinflation reached 65,000% in 2018, decimating the Bolivar and driving mass emigration, with over 7 million Venezuelans fleeing the country.

Economist Gabriela Sade, previously based in Caracas, described the dire conditions in 2019 with empty supermarket shelves and rampant poverty. She eventually relocated to the U.S., where she found better economic opportunities and the ability to support her family back home.

Despite some signs of economic stabilization, such as a 4% average annual growth from 2021 to 2023 and eased shortages due to relaxed import restrictions, inequality remains stark. The wealth gap has widened, with the majority of Venezuelans still living in poverty while a minority enjoy luxury.

De facto dollarization has taken hold, with many transactions in main cities conducted in U.S. dollars, masking the Bolivar's severe depreciation. Jesus Palacios, an economist at EcoAnalítica, noted that while the economy shows signs of growth, it is uneven and largely benefits those connected to the government.

Jennifer Onteveros, a housekeeper in Caracas, shared her struggle to make ends meet despite earning $350 a month, reflecting the broader hardships faced by ordinary Venezuelans. She expressed a desire to leave the country unless significant political change occurs.

The U.S. military's recent intervention has created uncertainty about Venezuela's future governance. With the upcoming presidential election, many Venezuelans hope for change but remain skeptical about the prospects of meaningful improvement under the current regime.

Key Insights

• Venezuela experienced hyperinflation reaching 65,000% in 2018, which severely devalued the Bolivar and led to widespread economic hardship and mass emigration.
• From 2021 to 2023, Venezuela's economy showed signs of stabilization with an average annual growth rate of 4%, although this growth has been uneven and primarily benefits those with government connections.
• De facto dollarization has occurred in Venezuela, with many transactions in major cities conducted in U.S. dollars, which conceals the extent of the Bolivar's depreciation.
• Despite earning $350 a month, a typical salary for many, Venezuelans like Jennifer Onteveros still struggle to make ends meet, highlighting the persistent economic challenges faced by ordinary citizens.