Global institutions remain hopeful about Venezuela despite political difficulties and the earthquake

On June 24, 2026, at 6:04 p.m. local time, a 7.2-magnitude earthquake struck Venezuela. Thirty-six seconds later, it was followed by a 7.5-magnitude mainshock, in a phenomenon known as a doublet. Both earthquakes, which originated in San Felipe, Yaracuy State, devastated the country: 6,500 people died and 226,700 were injured, many of whom were at home due to the holiday that day; some 25,000 homes were destroyed or damaged. The recovery of bodies was particularly difficult in La Guaira, a coastal area of Venezuela; the states of Carabobo and Aragua were also affected, as was the capital, Caracas. It was the strongest earthquake to hit Venezuela in 125 years.

The damage was extensive—some estimates exceed $30 billion—and pessimism immediately took hold among experts. Not only does Venezuela have a severely impoverished “ Economics ” following years of Chavismo’s harmful policies, but the remnants of that regime—now led by Delcy Rodríguez following Nicolás Maduro’s arrest and indictment in the United States—offer little assurance to international capital that it can safely invest in the country.

However, as the months have passed and Caracas has shown some willingness to comply with the guidelines coming from Washington regarding a path toward economic and political liberalization, hope for a gradual recovery in Venezuela has begun to take hold, even though many uncertainties remain. Thus, the “ report ” published in August by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) projects Venezuelan GDP growth of 6.5% for this year and next. For its part, the International Monetary Fund, in its October “ update ” report, estimates 7% growth in 2027, following a slightly lower increase—5%—in 2026 due to the impact of the earthquakes. These percentages are well above the 2.2% and 2.3% that ECLAC and the IMF, respectively, assign to the Latin American context, although Venezuela certainly starts from a worse status .

The Direct Consequences

The costs of the earthquakes have been assessed in various ways. Early on, economists Asdrúbal Oliveros and Jesús Palacios estimated the country’s physical damages at 9,000 million U.S. dollars, based on the data collected by the United Nations Development Program ( development , UNDP) in the days immediately following the earthquake. More pessimistic figures were included in the “ report ” by the United Nations Office for Disaster Risk Reduction (UNDRR), according to which the twin earthquakes caused damage totaling 37,000 million dollars. This estimate distinguished between damage to buildings (residential, commercial, educational, etc.), which totaled $24,000 million, and damage to infrastructure (water, transportation, sanitation, etc.), which totaled $13,000 million. This figure does not take into account indirect economic losses, disruptions to productivity, effects on supply chains, and other factors.

The World Bank’s Global Rapid Post-Disaster Damage Estimation (GRADE) study provided more detailed information, estimating damage to physical assets at $19,600 million: Residential buildings bore the brunt of the damage, with $9.3 billion in losses (47% of the total), followed by commercial or nonresidential buildings, with $5.0 billion (26%), and infrastructure, with $5.2 billion (27%). The damage was concentrated in the La Guaira area and the Capital District, with these two areas accounting for 47% of the total damage caused in the country, with economic estimates of $5,000 million and $4,300 million, respectively; they were followed by the states of Miranda ($3,800 million) and Carabobo ($3,700 million).

The Indirect Consequences

An earthquake like the one that struck Venezuela on June 24 would devastate any country that experienced it, with reconstruction costs similar to those faced by the Caribbean nation. However, it is important to highlight Venezuela’s precarious institutional and economic status prior to this catastrophe: in 2025, 68.5% of households lived in monetary poverty and 55% in multidimensional poverty, according to the survey UCAB national survey.

For its part, the country’s oil industry was relatively unaffected compared to other sectors. The main oil-producing regions (Zulia, Anzoátegui, Monagas, and Guárico) were located far from the epicenter of the earthquakes, sustaining very little damage to their infrastructure (only between 5% and 8% of the total damage nationwide). However, this does not mean that the industry was completely unaffected, as it was impacted by the general deterioration in logistics. Similarly, production was not interrupted, with annual production expectations remaining at 1.3 million barrels per day—20% higher than the average for the fourth quarter of 2025, as Oliveros and Palacios noted.

The disaster has had a clear impact on the cost of living. While at the beginning of the year a decline in inflation was projected for 2025—which stood at 252%—the IMF forecasts that this figure will reach 467% in 2026, before falling to 174% in 2027. The earthquakes caused shortages in certain areas, driving up transportation costs and increasing the demand for foreign currency to finance emergency imports, thereby impacting a population that has been suffering from nearly chronic hyperinflation for years.

Furthermore, the enormous cost of reconstruction adds to a massive national debt, which could range from 150,000 to 200,000 million dollars, but which some estimates put as high as 240,000 million—more than double Venezuela’s GDP, which is about 100,000 million. Even before the twin earthquakes, the Venezuelan government was making efforts to refinance its debt.

Lack of transparency

Venezuela faces a colossal reconstruction cost, along with the burden of enormous debt, and this adds to a mountain of challenges the country has been facing since 2013. According to the World Bank’s GRADE ( report ), if public and private investment levels remain at their current levels, the Venezuelan government will have no choice but to reallocate its limited resources to reconstruction, diverting funds from productive investments, causing the recovery process to take more than a decade, and leaving all productive capacities at pre-earthquake levels until 2036.

So, what can be done in the face of this status? Experts indicate that in order to address these challenges and finance reconstruction, Venezuela’s response will have to be based on four pillars: international cooperation, multilateral institutions, private investment, and an organized civil society.

There have been international financial aid n efforts, with the United States announcing approximately $300 million in attendance; however, the lack of transparency with which Washington is handling the revenues it manages from the Venezuelan oil industry does not financial aid attract contributions from other countries. According to Alejandro Grisanti, director of Ecoanalítica, one month after the disaster, approximately $720 million in international financial aid for reconstruction had been identified, a figure far below the enormous amount of funding required for reconstruction.

Private investment also faces this same problem of mistrust. As noted by the Washington-based think tank WOLA—which is critical of the Trump administration—Venezuela does not even have a published national “ budget ,” and is considered the third most corrupt country in the world.

One of the biggest unknowns regarding Venezuela’s finances is where the oil revenues are going; under a completely anomalous “ status ,” the United States is collecting these revenues in an account supervised by the U.S. Treasury and then transferring them to Venezuela. The Trump administration has not yet disclosed how much oil has been sold, how much revenue has been collected, or how these funds have been used. According to the U.S. think tank the committee of Foreign Affairs, during the four months that the United States took control of the country following Maduro’s capture on January 3, oil worth $8 billion had passed through this system. This lack of clarity regarding revenue contributes to an atmosphere of opacity, which compounds the lack of trust in the country’s management of its funds, ultimately slowing down reconstruction efforts.