January 10 is a crucial day in Venezuela because it initiates a new presidential term.
Nevertheless, the problem is the controversial fact that the elections on July 28 have brought to the fore, in which President Nicolás Maduro declared himself the winner without any proof.
On the contrary, the opposition candidate Edmundo González announced himself as the winner, proving this with the assistance of electoral records from polling station witnesses and thereby obtaining the support and recognition of the international community, such as the European Union, Argentina, Chile and most of LATAM.
We will examine different scenarios for Venezuela in 2025 depending on how the political landscape develops.
What are the economic scenarios for Venezuela in 2025?
Venezuelan economist Aldo Contreras provided a profound look into Venezuela’s economic prospects, evaluating two possible scenarios by 2025.
He said to Invezz that if Nicolás Maduro remains in power, the country will see “very exiguous growth,” with an economic increase of roughly 4% to 5%.
While this nominal increase could raise the Gross Domestic Product (GDP) from around $106 billion to $110 billion, it is critical to grasp the astonishing truth that Venezuela’s economy has collapsed by approximately 75% from its previous top of $500 billion.
Contreras emphasizes the underlying contradiction: “In terms of percentages, this growth is what many countries experience, but nominally, the decline is devastating.”
In this difficult environment, Contreras expects inflation to reach 60% during Maduro’s presidency, worsening Venezuela’s economic picture.
He cautions that “with the arrival of Donald Trump to the presidency on January 20, the likelihood of intensified economic sanctions could significantly impact oil production,” which may fall dramatically, resulting in acute gasoline shortages and reduced fiscal revenues for the state.
This condition threatens to stymie any possible recovery, resulting in lower foreign currency revenues and a declining exchange rate, which might exacerbate the cost of living crisis for many Venezuelans.
Contreras emphasizes the humanitarian significance of these economic issues, stating that around “53% of the population is living in extreme poverty,” which is defined as surviving on less than $1.25 per day”.
Despite a significant rise in tax revenue—from $6 billion in 2023 to $12 billion in 2024—this has not translated into better living conditions or salary increases.
Contreras believes that with many residents earning an alarming average of $3 per month, urgent improvements are required.
He adds that without “solid institutions and a favourable international economic context,” Venezuela’s prospects in 2025 are gloomy, emphasizing the critical need for stability and governance to create genuine economic recovery and social well-being.
Venezuela’s potential losses in oil revenues with Maduro’s remaining in office
Contreras also asserts that the possibility of Nicolás Maduro still being in power will lead to Venezuela losing at least $12 billion a year in oil revenues.
This is especially foreseeable due to the expected retreat of leading oil companies like Chevron, Repsol, and Eni, which have been crucial players in the Venezuelan oil sector.
The prospect of growing penalties could lead to the companies’ exit, which in turn, would worsen the economic situation.
In the case when these companies would be out, Venezuela’s oil production could drop from 1 million barrels per day to the minimum of 500,000 barrels per day.
This remarkable shrink in production would not only interfere with oil extraction but also cause severe problems for the government’s income.
The untenable $12 billion plunge in oil earnings would be a critical blow to the state’s financial situation thus causing even deeper problems in an economy that is already under immense pressure.
Who will be willing to do business with Venezuela if Maduro stays?
Contreras also explained the potential for business with Venezuela if Maduro stays in power and specified that neighbouring states like Colombia are keeping up with President Gustavo Petro who is navigating a narrow path to balance responsive diplomatic relations and avoid/conceal closures of borders.
Similarly, Brazil and Mexico are following the examples of cautiousness, demonstrating a carefully balanced approach to relations with Venezuela.
He believes that countries like Russia, Iran, Turkey, and India could also set up business with Venezuela, alongside China, which is the first link in the chain of the country’s dealings with imports.
However, Contreras accentuates the challenges Venezuela has in its economy mainly the lack of financing from abroad, governmental debts, and the problems in the floating of new bonds.
These issues seriously impede the bent of Venezuela on being an open economy, thus, restricting it from effectively teaming up with possible international partners.
The presence of economic difficulties not only raises questions but also restricts the possibilities of what business partnerships can be realistically pursued in the present situation.
The possible outcomes of opposition leader Edmundo González ascending to power
If Edmundo González were to take the lead of Venezuela, it is speculated that the nation could encounter an extraordinary increment, going up to 50% or more, in its Gross Domestic Product (GDP).
Economist Aldo Contreras noted that such growth would be propelled principally by the collaboration of international financial organizations, particularly the International Monetary Fund and the World Bank.
He underlined, that the rehab of national assets considered lost, around $700 billion, is of paramount importance for the economy’s revival.
The inflow of foreign investments, accompanied by low country risk, could really place the economy on firm footing and lead this way to an environment where substantial GDP growth is possible.
Furthermore, Gonzalez’s administration can be marked with enhanced tackles to handle inflation, which in turn may give rise to a dual-currency economy.
Aldo Contreras thinks the return of a strong banking sector and the improvement in credit facilities would be a landmark for economic stability.
As the economy enhances, the outspread rate of skilled labour hand may fill in the gap by sending workers from other countries to participate in the construction of national infrastructure, including the laying of roads, airports, seaports as well as educational institutions.
Contreras noted that the moderate inflation target will secure the financing required for the economy’s return to health.
The impending isolation of Venezuela
Speaking to Invezz, political analyst Pablo Quintero forecasted a gradual and hitherto unknown acknowledgement of the Maduro government by the international community after the events anticipated on January 10.
He brings this up to draw a parallel to the situation of 2019 and stresses that countries will be navigating their diplomatic relationships with Venezuela more, based on the interests of each nation.
Quintero marks clearly that such a transformation will equate to a big impact visa-vis the trade ties, particularly, concerning Colombia’s commerce with Venezuela.
He mentions the already figured-out consequence of the activation of the border at Cúcuta, a major juncture for cross-border trade, by claiming that the trend of goods will most probably be stopped as well.
In addressing the wider aspect of this international position, Quintero posits that such a wave of nonrecognition can create intensive diplomatic pressures and may even lead to economic isolation of Venezuela thus abridging its potential for outside investment and banking activities.
He speaks of the kind of sanctions imposed, saying, The so-called overcompliance will reveal, the implementation will be as those suffered back in the past times like 2017 and 2019.
Quintero suggests that the government’s inability to show the acts that would prevent isolation can lead to the self-imposed condition of marginalization.
Regarding the domestic environment, Quintero registers a concerning remark about the social aftermath of this international isolation.
He is predicting an acquaintance of international relationships going south in the minds of the people who would wonder whom to believe in the next electoral process, thus, attaining more social nihilism.
The discontent might well be the reason for massive emigration, especially to Brazil and Colombia’s neighbouring countries which are major target countries for fleeing citizens of Venezuela.
He stresses, with figures as much as 2 million to 5 million people the humanitarian crisis would take a severe turn with the long-lasting disturbances that the country is experiencing in politics and economics.
What’s ahead for Venezuelan opposition?
Pablo Quintero, a political analyst has given the view that the Venezuelan opposition’s prospects of securing any support from the international community are very much narrowed.
Since 2017, the setting of the world international scene regarding Venezuela has been a shift-and-repeat process, the Yoyo type specifically, and was majorly affected by the benchmarks projected by Juan Guaidó which in turn abstracted and blurred the focus of this subject on the whole planet.
Back then, the Organization of American States (OAS) the United Nations, and the U.S. government tried to overrule Maduro and back Juan Guaidó, but in fact, the listed organizations did not achieve good results in 2019.
With the historical context having been mentioned, Quintero argues that caution will be more strict from the international community in the future, due to the fact that different pressing conflicts and economic and geopolitical crisis will attract global attention, whereas Venezuela will not be the only question of concern.
At present, the need for a shift in U.S. policy is, therefore, pointed out by Quintero. He particularly mentions that the hyper-tension in the Middle East and the fluctuations of the oil prices have taken the U.S. focus away from Venezuela for now.
The U.S. role in the Venezuelan Affairs will be like the previous global events that were chief global issues, and thus, no Venezuelan opposition side can count on such a guarantee to acquire the progress in independent and political matters of non-conventional nature.
Speaking about the internal dynamics of political change in Venezuela, he was clear, though, that they are mainly determined by endogenous causes.
These encompass the readiness of top-level officials to renovate the vestiges of the past as well as military sponsorship of the proposals—Quintero asserts that these are absent in the nearer future.
Therefore, Quintero thinks that the opposition must come up with a clear and more focused strategy, harden up and deal with the internal issues.
With the constraints of global distractions due to the diversion of attention and the convolutions in the local political scene. The analyst concluded that any possibility of a real change in Venezuela lies in the hands of Venezuelans and the opposition’s ability to secure military support.
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