By most metrics, Guyana's economy has performed well in recent years. Progress through 2015-2017 will depend significantly on two factors. One is the arrangement of finances for the Amaila Falls Hydroelectric Project (AFHP). The other is the possible lack of access to credit through Venezuela’s discount oil scheme, Petrocaribe. All this is at a time that Guyana's political situation is complex. On 10 November, President Donald Ramotar prorogued (suspended) Guyana's parliament. On 21 January, the president announced that a general election will be held on 11 May next. According to the United Nations' Economic Commission for Latin America and the…

While there were a number of concerns about the performance of the Latin American economies last year, in retrospect inflation – for the vast majority of countries – was not one of them. With two big exceptions: Argentina and Venezuela. Most of Latin America experienced single digit inflation last year, and for a majority of counties the cost of living increase came in at under 5%. For the region as a whole, this was a vast improvement on the sometimes-hyperinflationary 1980s and a variety of subsequent price spikes. Venezuela and Argentina, however, were exceptions to the rule, with both marked…

This year will be challenging for Venezuela, to put it mildly. Here we assess the likelihood of the country defaulting on its foreign debt payments. Asking whether there will or won’t be a default is a simple question, but coming up with an answer is rather more complex. A default is probable, but not certain: there is also a ‘muddle through’ option. The argument for a Venezuelan default this year is strong. It consists of three main propositions: (i) Venezuela is 95%-plus dependent on oil revenues for its foreign currency earnings; (ii) the price of oil has fallen by over…