The International Monetary Fund on Thursday described Venezuela's economic and humanitarian situation as "quite fragile," pointing to exceptionally high inflation, a rapidly depreciating currency and severe strains on public finances and social services.
IMF spokeswoman Julie Kozack told reporters the global lender is continuing to monitor events in Venezuela despite having paused formal relations with the government since 2019. She said the IMF would look to its members and the international community for direction on whether to resume engagement with Caracas.
Inflation and currency pressure
The IMF said it was seeing inflation estimated to be in the triple digits and a rapid depreciation of the currency. Those conditions, according to the IMF, are contributing to a prolonged squeeze on livelihoods and access to basic goods and services.
Humanitarian and social conditions
Kozack said the country is experiencing a "severe and prolonged economic and humanitarian crisis." She added: "Socioeconomic conditions remain very difficult; poverty is high, inequality is high and there's widespread shortages of basic services. The situation overall is quite fragile." The IMF noted that about a quarter of Venezuela's population - roughly 8 million people - has left the country since 2014.
Debt and international engagement
The fund estimated Venezuela's public debt at about 180% of gross domestic product, a figure presented before any judgments or arbitration tied to earlier defaults. Kozack said IMF Managing Director Kristalina Georgieva discussed Venezuela with U.S. Treasury Secretary Scott Bessent as part of their regular consultations on policy and country matters.
The IMF said it is still assembling information and facts to decide the best course of action on Venezuela. The fund has not had formal engagement with Venezuela for more than two decades, completing its last full assessment of the country's economy in 2004. Venezuela paid off its last World Bank loan in 2007, when then-President Hugo Chavez declared the country "will no longer have to go to Washington" for funding.
Georgieva said last month that the IMF was prepared to support Venezuela but that such support would require recognition of the country's leadership by major IMF shareholders, including the United States, and an explicit request for assistance from Venezuelan authorities.
Special Drawing Rights and potential access
If the IMF restores ties with Venezuela, the South American oil exporter would gain access to about $4.9 billion in Special Drawing Rights - reserve assets that were frozen when the IMF suspended dealings with Venezuela seven years ago over the lack of recognition of the Maduro government. IMF members' recognition of a government remains a precondition for restoring full operational relations.
Scott Bessent said last month that the Trump administration would be willing to convert Venezuela's frozen SDRs into dollars for use in rebuilding the country's economy as sanctions are progressively lifted. The IMF notes that SDRs are a basket of reserve currencies comprised of U.S. dollars, euros, yen, sterling and yuan.
Political developments and recent statements
The IMF briefing took place amid a flurry of political developments. U.S. President Donald Trump last week said he would visit Venezuela. Last month, U.S. forces attacked Venezuela and captured its leader, Nicolas Maduro, who had been in power for more than 12 years. Trump said he would recognize interim President Delcy Rodriguez, who served as Maduro's vice president, as the head of the legitimate government of Venezuela, which would represent a change in his position. Trump administration officials in recent weeks had made clear that such a recognition was not Washington's position.
The IMF's statements underline a process in which economic realities, international recognition and political developments will all inform any decision to re-establish formal ties and unlock frozen resources that could be used to support recovery efforts if the necessary conditions are met.