Venezuela is grappling with surging inflation and worsening economic hardship despite promises of a rapid recovery following the removal of former president Nicolás Maduro, casting doubt on claims that the country’s economy would quickly rebound under policies backed by the administration of United States President Donald Trump. Inflation accelerated sharply to around 600 percent in February, highlighting deep structural challenges and the ongoing scarcity of dollars that continues to drive price increases across the economy.
The situation has left many Venezuelans frustrated, as living conditions have deteriorated rather than improved in the two months since the political transition. A recent Meganálisis poll found that roughly 80 percent of Venezuelans say their economic situation has not improved so far this year compared with 2025. While many remain hopeful that conditions could improve in the coming months, only a small minority — about 7 percent — reported any tangible improvement in their livelihoods.
The country’s economic difficulties are being compounded by declining oil production, the backbone of Venezuela’s economy. Oil output fell by 21 percent in January to about 780,000 barrels per day, while exports also dropped significantly. The decline has restricted the inflow of U.S. dollars that Venezuelans rely on for daily transactions as the local currency, the bolivar, continues to lose value.
A new currency management system introduced by the U.S.-supported administration has also faced criticism. The government launched dollar auctions intended to distribute foreign currency through private banks to businesses. However, analysts say the program has been slow and opaque, limiting its effectiveness in stabilizing the market and easing pressure on prices.
Analysts say the shortage of dollars is one of the main factors driving inflation and eroding purchasing power for ordinary citizens. Phil Gunson, a Caracas-based analyst with the International Crisis Group, said the promised economic improvements have yet to materialize for most people. He noted that inflation remains high, the bolivar continues to depreciate and many workers are still earning extremely low wages.
The government’s broader strategy centers on easing sanctions and asserting control over oil revenues in hopes of stabilizing the economy. However, the benefits of these policies have not yet reached households. The gap between political expectations and economic reality has become increasingly apparent as families struggle with rising living costs.
Wage levels remain one of the most pressing issues. Venezuela’s official minimum wage has remained unchanged since 2022 at 130 bolivars, equivalent to roughly 30 U.S. cents at the official exchange rate. For most workers, the figure has become largely symbolic, forcing many to rely on informal work or remittances sent by relatives abroad. Surveys indicate that a majority of Venezuelans believe a livable minimum wage should range between $200 and $400 per month, while the monthly cost of a basic basket of food for a family of five is estimated at around $677.
Despite the grim outlook, some analysts believe the economy could gradually improve if oil revenues recover. Luis Vicente León, president of Caracas-based consultancy Datanálisis, said oil income could potentially double in the second half of the year, which might lead to a 17 percent increase in consumer demand. According to León, many Venezuelans currently feel optimistic about future improvements even though those expectations have not yet translated into higher incomes or stronger economic activity.
The interim government led by Delcy Rodríguez has begun introducing policy changes aimed at reviving key sectors. Authorities recently overhauled the country’s long-standing hydrocarbons law, giving officials greater flexibility to adjust taxes and royalties in an attempt to attract private investment into the oil industry. The administration has also passed new legislation to revive the mining sector, which had become plagued by organized crime and environmental damage after the state seized the assets of foreign companies decades ago.
Efforts to rebuild investor confidence have included diplomatic engagement with the United States. U.S. Energy Secretary Chris Wright and Interior Secretary Doug Burgum recently visited Caracas, signaling Washington’s interest in supporting Venezuela’s energy sector revival and expanding cooperation.
However, public frustration is rising as economic hardships persist. Demonstrations increased by 53 percent in January, with many protests driven by labor demands for higher wages and better pensions. Workers, retirees and pensioners have taken to the streets across the country, calling on the government to address the rapidly rising cost of living.
The scarcity of dollars has also complicated Venezuela’s exchange system. Banks report selling dollars at an average rate close to 500 bolivars per dollar, higher than the official rate but still below the roughly 600 bolivars commonly seen in the parallel market. Businesses frequently end up paying much higher prices for dollars in unofficial markets due to limited access through official channels, increasing operating costs and uncertainty.
Analysts say inflation is likely to remain elevated in the near term unless dollar supply increases and exchange rates converge more closely. JPMorgan analyst Katherine Marney noted in a recent research note that when Venezuela was able to export oil freely in mid-2024, exchange rate stability helped reduce annual inflation to about 35 percent. Without similar improvements in foreign currency availability, price pressures are expected to persist.
For many Venezuelans, optimism about the country’s future remains tempered by the slow pace of economic change. Analysts warn that the high expectations created by promises of recovery could eventually turn into frustration if living conditions fail to improve in the coming months. As protests grow and families continue to struggle with rising prices, the government faces mounting pressure to deliver tangible results from its economic reform efforts.
