Venezuela’s economic recovery of 2019-2025: De facto dollarisation and the limits of commercial expansion

Abstract

This article examines whether Venezuela’s apparent economic recovery since 2019 reflects genuine structural improvement or merely a temporary, consumption-driven boom rooted in de facto dollarisation and informal rent circuits. Using data from the IMF, ENCOVI, and international reports, along with an institutional-economics framework, we analyse macroeconomic indicators, trade patterns, and distributional effects to assess the depth and sustainability of recent growth. The evidence indicates that the post-2019 expansion has been largely commercial, concentrated in a narrow, dollarized market segment linked to the Maduro government and sustained by non-productive inflows, such as remittances, rents, and illicit transactions. While real GDP grew moderately between 2021 and 2025, investment, capital formation, and employment remain severely depressed, suggesting that the observed recovery is fragile and unsustainable. The findings reveal that Venezuela’s economy continues to suffer from institutional decay, inequality, and persistent dependence on external rents, leaving it far from regaining its pre-2014 output levels or establishing a foundation for long-term development.