economist
Economist Alejandro Grisanti explained that publishing and breaking down the total amount of Venezuela’s debt «would be a huge step forward» that would make it possible to conduct a genuine debt sustainability analysis.
In the coming days, the firm Centerview Partners will present a document outlining the main guidelines for Venezuela’s debt restructuring program. According to economist Alejandro Grisanti, the document will detail fiscal, debt, and real-sector figures that «in some cases, have not been published fully and consistently for more than a decade».
The economist asserts that official calculations point to a debt of nearly US$238 billion, a figure close to the US$240 billion amount published by the British newspaper Financial Times last July.
However, Grisanti notes that of the US$238 billion, some US$40 billion “would correspond to obligations between government entities or among institutions within Venezuela’s own public sector.”
He added that publishing and breaking down the total amount “would be a major step forward” that would make it possible to build a genuine debt sustainability analysis. The next step would be to validate and build a credible macroeconomic program around these data and obtain multilateral institutional support.
On this point, he stresses that, as a fundamental measure, there must be more active technical involvement by the International Monetary Fund (IMF), something that has not happened so far.
According to Grisanti, this could help significantly improve Venezuela’s debt-to-GDP ratio in the coming years, “even while maintaining much of the status quo,” since “if the recovery causes nominal GDP in dollars to grow considerably faster than the interest accruing on the debt, the denominator will grow faster than the numerator and the debt-to-GDP ratio will begin to fall.”
Although he emphasized that this does not eliminate the need for a deep restructuring, it could change “future payment capacity, the relief required and, very importantly, reduce the urgency of prematurely closing a deal,” he explained on his “X” profile.