IMF warns Venezuela’s economy and humanitarian situation is ‘quite fragile’ 

The International Monetary Fund (IMF) has described Venezuela’s economic and humanitarian situation as “quite fragile”, pointing to an estimated triple-digit inflation and a sharply depreciating currency.

In a briefing on Thursday with reporters, spokeswoman Julie Kozack said the organisation continues to closely monitor developments in the South American nation, even though the IMF has had no formal relations with the Venezuelan government since 2019.

Kozack emphasised that any decision to re-engage would depend on guidance from the IMF’s member countries and the broader international community.

Economic and political crises in Venezuela have driven massive emigration: Since 2014, roughly a quarter of Venezuela’s population – about 8 million people – has left the country, creating one of the largest displacement crises in recent history.

The Venezuelan economy in 2026 remains in a state of deep structural crisis.

It is currently navigating a period of unprecedented volatility and rapid policy shifts, following years of hyperinflation and a contraction of its gross domestic product (GDP).

The United States military’s abduction of former President Nicolas Maduro last month has triggered a seismic shift in both the political and economic landscape.

While Maduro remains in US custody facing narco-trafficking charges, the acting administration under interim President Delcy Rodriguez has moved swiftly to implement a plan for stabilisation, recovery and transition.

“Venezuela is undergoing a severe and prolonged economic and humanitarian crisis,” Kozack said during Thursday’s briefing. “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 figures show Venezuela’s public debt sitting at roughly 180 percent of its GDP right now, before factoring in any court rulings or arbitration payouts from old defaults.

Kozack said the global lender was still gathering information and facts on the best way to proceed with the South American country.

The IMF hasn’t had any formal dealings with Venezuela in more than 20 years. Its last official assessment of the country came in 2004.

In 2007, Venezuela paid off its last World Bank loan under Maduro’s predecessor, the late Hugo Chavez.

If the IMF restores ties with Venezuela, the South American oil exporter would have access to about $4.9bn worth of Special Drawing Rights (SDRs) that were frozen seven years ago, after the IMF refused to recognise Maduro’s leadership.

SDRs are reserve assets whose values are tied to five currencies: the US dollar, the euro, the Chinese renminbi, the Japanese yen and the British pound sterling.

But US engagement in Venezuela could also create change in the country’s economy.

US Treasury Secretary Scott Bessent said last month that the administration of President Donald Trump would be willing to convert Venezuela’s SDRs to dollars to help rebuild the country’s economy.

And last week, the US Department of the Treasury announced it was easing some sanctions on Venezuela’s energy sector.

The Trump administration has placed a heavy focus on Venezuela’s vast oil reserves, even going so far as to claim that the natural resource rightfully belonged to the US.

Citing US oil exploration in the area in the 20th century, Trump has called Venezuela’s decision to nationalise the oil sector the “largest theft of property in the history” of the US.

His government has encouraged foreign investment in Venezuela’s oil sector since Maduro’s removal.

It has also issued two general licences, including one that allows energy companies Chevron, BP, Eni, Shell and Repsol to conduct further oil and gas operations in Venezuela. Those companies already have offices in the country and are among the main partners of state-run oil company PDVSA.

The second licence allows foreign companies to enter new oil and gas investment contracts with PDVSA.