Investing in Venezuelan debt will remain profitable win or Enrique Capriles Hugo Chavez in the 2012 presidential elections scheduled for Sunday.

The elections on Sunday October 7, 2012 in the Bolivian Republic of Venezuela, will be an opportunity for voters to elect the next president of the country for the period between January 10 2013 and January 10, 2019, between the candidate ruling Hugo Chavez Frias and the opposition Enrique Capriles.

Investments in Venezuela remain profitable despite the election results 2012

The election results, however, not impact greatly on the decisions of investors, analysts polled by The Wall Street Journal , essentially because Venezuelan bonds would remain attractive for the high interest rates that the new government will continue to pay for them given the strong support that will continue to represent the vast oil reserves of Venezuela, not being expected a decline in fuel prices in the short and medium term.


Investing in the Caracas Stock Exchange continue to be profitable

The surge in recent polls opposition candidate Capriles , however, and promises to correct the fiscal imbalances of the Chavez regime and implement market reforms have made ​​Venezuela’s sovereign bonds rebound in recent weeks, and “could be best performing investment in emerging markets over the next 12 months, ” according to senior credit analyst at Barclays PLC, Alejandro Grisanti. Like the Caracas Stock Exchange, which according to The Wall Street Journal, and recorded a significant rise “is among the best performers in the world in 2012 and collects an advance of 156% so far this year” .

Inflation and deficit: serious threats to Venezuela

But high interest rates paid by the Venezuelan government debt, possible because of the high level of inflation, the highest in Latin America, and its growing fiscal deficit would be around 19.5% of GDP would exceed that of some European countries with serious problems now and reflect economic ruin in which the country-, are both indications that the situation could become enviable in the future.Especially, if oil prices fall, inflationary pressures are generated over the more expensive imports as a result of the devaluation of the Bolivar that Chavez should do to address the deficit, or if Caprices not have as easy to undertake liberalizing policies given the heritable influence of Chavez in the Venezuelan society and institutions.