The Chinese rating firm downgraded Venezuela's credit ratings and forecasts a fiscal gap of 14.7% of GDP

Wednesday August 13, 2014 10:42 AM
Dagong Global Credit, a Chinese credit rating firm, founded upon the joint approval of the People's Bank of China and the former State Economic and Trade Commission, reckons Venezuela is a high-risk country in the short and medium term, and has downgraded the country's credit ratings from BB+ to BB-.

In a report, Dagong points out serious macroeconomic imbalances will drag Venezuela into recession in the short term, and exacerbate social unrest.

The report indicates that in light of the recession and intensified social contradiction, government expenditure will continue to expand, putting greater pressure on the government finances. In 2014, the general government deficit is estimated at 14.7% of GDP, whereas the government debt is estimated at 52.2% of GDP, and would possibly exceed 60% in 2018.