£810 / $1295 / €985
In the short-term, Business Monitor International (BMI) believes that investor confidence in Venezuela's private sector will remain low following the re-election of President Hugo Chávez, adding pressure to reinforce political ties with allies such as China, Russia and Iran to secure investment. However, given the uncertainty surrounding Chávez's health, who is battling cancer, and the growing unity among the opposition, BMI believes that a regime change cannot be ruled out in the coming years.
Venezuela’s economy relies on petroleum prices, which can be unpredictable. According to BMI, real GDP growth is forecast at 4.7% in 2012, with GDP reaching US$393.1 billion, equal to US$13,119 per capita. GDP is expected to fall to US$357.4 billion in 2017, equal to US$10,313 per capita. The Venezuelan bolivar (VEF) is expected to weaken considerably against the US dollar over the forecast period, passing from VEF4.3 in 2012 to VEF12.5 in 2017, which might affect the value of the medical market. Inflation is among the highest in the world, valued at 24.4% in 2012, which adds pressure to the economy, but it is projected to fall to 15.0% in 2017.
Venezuela’s full membership of the Southern Common Market (MERCOSUR) (MERCOSUR – Mercado Común del Sur) became effective in July 2012, along with Argentina, Brazil, Paraguay and Uruguay. This ratification took place during the temporary suspension of Paraguay from the trading block, as Paraguay had previously blocked Venezuela’s full membership. MERCOSUR could fuel Venezuela’s industrialisation, as Venezuela has the potential to produce more, replace imports and increase exports.
Diagnostic imaging apparatus represents 19.5% of the market in 2012, followed by consumables (11.5%), patient aids (10.5%), orthopaedic & prosthetic appliances (8.5%) and dental products (7.3%); other medical products, which are not categorised, represent the remaining 42.7% of the total. Medical market growth has historically been volatile, but much of the recent growth is explained by the implementation of Barrio Adentro. The 12-17 CAGR is projected at 8.8% in US dollar terms. Medical imports have increased rapidly, reaching US$1.9 billion in 2011, but this level is not expected to be maintained in the forecast period.
Between January and September 2012, the Foreign Exchange Administration Agency (CADIVI – Comisión de Administración de Divisas) authorised funding of US$3,007.7 million for the health sector, including pharmaceutical and medical products. The health sector had the second highest authorised funding, behind the food sector, and represented 16.3% of the total.
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