Venezuela's 2025 Budget Proposal

By Mayela Armas

CARACAS (Reuters) – Venezuela's government is planning a $22.7 billion budget for 2025, which represents nearly an 11% increase from the $20.5 billion allocated for this year. Vice President Delcy Rodriguez made this announcement to lawmakers at the government-allied National Assembly on Tuesday.

Rodriguez expressed optimism, stating, "2025 will be a better year because we have learned to manage the difficulties."

According to the budget bill reviewed by Reuters, contributions from the state-run oil company PDVSA are expected to decline by 14.6% next year. The income from PDVSA, including sales and taxes, is projected to fund 53% of the government’s spending needs, amounting to $10.1 billion, based on the exchange rate established by Venezuela's central bank. In 2024, PDVSA's contribution was $11.9 billion.

PDVSA has yet to comment on its forecast contribution.

Tax revenues are expected to contribute $5.25 billion, which will finance 28% of the budget. Additional funding will come from mining, loans, and debt issuances.

The document did not provide details on anticipated economic growth or inflation forecasts.

Following years of hyperinflation and extensive U.S. sanctions, President Nicolas Maduro's administration adopted orthodox policies in 2022, such as credit restrictions and reduced public spending, to stabilize prices. Maduro, preparing for his third term post a controversial election, claims his government has managed to defeat inflation exceeding 100,000%, maintaining that prices in 2024 resemble those of 2014.

However, prices have surged in the last quarter of the year after the government allowed the bolivar currency to float in mid-October, leading to a depreciation that has resulted in the bolivar being valued at approximately 45 per dollar, as reported by the central bank.