Venezuela’s Economy Is Accelerating, The Growth Is Real – The Foundation Beneath It Is Not

There is a subtle buzz in Caracas these days that wasn’t present a year ago. Modest but real, cranes have returned to the city’s skyline. There are fewer complaints from drivers regarding fuel lines. Old coworkers are calling engineers who have discreetly left for Bogotá or Madrid to ask if they would consider returning. It’s the kind of texture that indicates something is changing but is difficult to quantify in a spreadsheet.

For once, the numbers reflect the sentiment. Just eighteen months ago, Venezuela’s economy would have seemed unrealistic, but now it is expected to grow by about 12% this year. The daily production of oil has surpassed one million barrels. Since former dictator Nicolás Maduro was overthrown in January, exports to the US have increased by almost 200%, and joint ventures with companies like Chevron, Repsol, Eni, and Maurel & Prom are transitioning from negotiation rooms to actual drilling pads. Even among ardent skeptics, there’s a feeling that something has changed.

Delcy Rodríguez, the acting president, has handled the situation skillfully. Many saw Paula Henao’s appointment as Minister of Hydrocarbons as a sign that she was less ideological, pragmatic, and technocratic. Meetings now feel faster, more transparent, and less performative, according to foreign executives in Caracas. This might be real reform. It might also be choreography for a reassuring audience.

However, the texture of the recovery seems uneven when strolling past the refineries of Falcón or through the industrial outskirts of Valencia. The first half of 2025 saw a 14% increase in cement production. Oilfield service companies are hiring once more. Even after slowing, inflation is predicted to end the year close to 155%, and the parallel exchange rate continues to reflect a different picture than the official one. Inflation in the triple digits is better. It has nothing to do with health.

This growth is being built on the same foundation that failed in the past, which is the deeper issue that everyone in the nation seems to sense but few politicians will acknowledge. The petrostate was created in Venezuela. It has now made the decision to reconstruct a petrostate following a generation of disasters. Similar architecture, improved intentions, and new management. The economy is the fundamental factor, as James Carville liked to reiterate in simpler terms and Karl Marx liked to note. The derivative is politics.

It appears that investors think the potential rewards outweigh the risk. Perhaps they are correct. With refineries, ports, roads, and a workforce that still knows how to do the job, the nation has a huge amount of idle capacity. Reintroducing that results in actual GDP figures that don’t require much creativity. It does not create a distinct nation.

Observing this from a distance gives me the impression that Venezuela is doing what damaged economies frequently do, which is to confuse acceleration with advancement. The aircraft is ascending. The engine makes a lot of noise. The fuel gauge is something no one wants to look at. Whether 2026 is a turning point or just another chapter in a well-known book will depend on reforms to the foreign exchange regime, the legal framework surrounding private investment, and the central bank’s financing of fiscal deficits.

The cranes continue to move for the time being. The refineries continue to operate. In January, a woman near the Punta Cardón refinery was seen doing what Venezuelans have been doing for a century: living next to oil and hoping it works out this time. Workers in Falcón stroll past stacks of barrels waiting to be shipped. It could. No one has been able to say that with a straight face in a very long time.