[slideshow_deploy id=’1647′]Venezuela’s GDP for 2011 is predicted to top $300 billion and its population is projected to reach 29 million. Foreign direct investment (“FDI”) in Venezuela has been lower in recent years compared to other Latin American countries. This decline is attributed to the country’s economic and political instability, nationalizations, increased government intervention in the economy, and restrictive legal framework. The Central Bank of Venezuela has reported that FDI in Venezuela decreased by 1.5 billion dollars from January to September, 2010, following a decrease of approximately 3.1 billion dollars in 2009. The current economic and political uncertainty in the country has impacted negatively the Venezuela retail sector.
According to a recent study , Venezuelans split their retail purchases in half between shopping centers and street retail. Shopping center visits for 2010 exceeded 530 million and shopping center expenditures were $5 bn (2010), down from $11bn in 2006. Alternatively, BMI’s Q42011 Venezuela Retail Report forecasts that the country’s total retail sales will grow by an average 20.2% a year in local currency terms between 2011 and 2015, from VEB249.87bn (US$116.51bn) to VEB500.08bn (US$233.18bn). Although hyperinflation, and the country’s first currency devaluation since 2005 make the outlook less certain, BMI expects an expanding population, rising disposable income and easier access to consumer credit to have positive effects on Venezuela’s retail sales over the long term.
BMI estimates that Venezuela’s retail sector will represent 8.7% of Latin America’s retail sales in 2011 and 11.9% by 2015. In terms of retail sub-sectors, Venezuela’s automotive sales are forecast to increase by 23.6% from US$0.55bn in 2011, to US$0.68bn by 2015. Consumer electronic sales are expected to go from US$3.24bn to US$3.68bn in the same period. Venezuela’s market offers continued growth potential in key digital products groups such as computers (less than 15% penetration), notebook computers and LCD television sets.