The International Monetary Fund has characterized Venezuela’s economic and humanitarian conditions as “quite fragile,” pointing to triple-digit inflation and a currency in steep decline as the country grapples with the fallout from decades of crisis and the abrupt removal of its former president.
Julie Kozack, an IMF spokesperson, told reporters Thursday that the organization is tracking developments closely despite having severed formal relations with Caracas in 2019.
Any decision to re-establish ties, she said, would require direction from the fund’s member states and the broader international community.
“Venezuela is undergoing a severe and prolonged economic and humanitarian crisis,” Kozack said. “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 country’s economy remains trapped in structural collapse. Years of hyperinflation and GDP contraction have left Venezuela navigating what Kozack described as unprecedented volatility, compounded now by the political upheaval that followed the U.S. military’s detention of former President Nicolas Maduro last month.
Maduro was taken into American custody and now faces narco-trafficking charges in the United States. His removal triggered rapid shifts in governance. Delcy Rodriguez, serving as interim president, has moved quickly to introduce measures aimed at stabilization, recovery and political transition, though the effectiveness of those efforts remains uncertain.
Venezuela’s public debt stands at roughly 180 percent of GDP, according to IMF figures — a calculation that does not yet factor in potential court judgments or arbitration awards stemming from past defaults.
Kozack said the fund is still gathering information on how best to approach the situation.
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The IMF has not conducted formal engagement with Venezuela in more than two decades. Its last official economic assessment was completed in 2004. Three years later, Venezuela paid off its remaining World Bank loan under Hugo Chavez, Maduro’s predecessor, effectively cutting ties with multilateral financial institutions.
Should relations be restored, Venezuela would regain access to approximately $4.9 billion in Special Drawing Rights that were frozen seven years ago after the IMF declined to recognize Maduro’s leadership. SDRs are reserve assets pegged to a basket of five major currencies: the U.S. dollar, euro, Chinese renminbi, Japanese yen and British pound.
U.S. engagement has already begun reshaping Venezuela’s economic landscape. Treasury Secretary Scott Bessent said last month that the Trump administration would consider converting Venezuela’s frozen SDRs into dollars to support reconstruction efforts.
Last week, the U.S. Treasury Department eased certain sanctions on Venezuela’s energy sector, a move that followed weeks of signaling from Washington that oil would be central to any American involvement in the country’s future.
The Trump administration has placed particular emphasis on Venezuela’s vast petroleum reserves. Trump himself has gone so far as to claim that the resource rightfully belongs to the United States, citing American oil exploration activities in the region during the 20th century.
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He has called Venezuela’s nationalization of its oil industry “the largest theft of property in the history” of the United States.
Since Maduro’s removal, the administration has encouraged foreign investment in Venezuelan energy. Two general licenses have been issued by the Treasury Department. The first permits energy companies Chevron, BP, Eni, Shell and Repsol to expand oil and gas operations in the country. Those firms already maintain offices in Venezuela and are among the primary commercial partners of PDVSA, the state-run oil company. The second license allows foreign companies to negotiate new oil and gas investment contracts directly with PDVSA.
Venezuela’s economic collapse has driven mass emigration. Since 2014, roughly 8 million people — about a quarter of the country’s population — have left, creating one of the largest displacement crises in recent history.
Many fled to neighboring Colombia, Peru, Ecuador and Chile, straining social services and labor markets across the region.
The IMF has not indicated a timeline for any potential re-engagement with Venezuela or outlined what conditions would need to be met before formal relations could resume.