International Monetary Fund: Venezuela economy will shrink by 7 percent in 2015

The International Monetary Fund is predicting Venezuela's troubled economy will shrink by 7 percent in 2015, suffering the worst contraction in Latin America.

It's a dramatic downgrade from October, when the IMF said Venezuela's economy would shrink by 1 percent.

In a post published Wednesday, IMF Western Hemisphere Director Alejandro Werner says Venezuela will be clobbered by falling oil prices, which have declined by half in the last six months. Oil accounts for more than 95 percent of the South American country's export earnings.

Werner says that the Argentine economy will also shrink, but by less than 2 percent, and predicts that overall growth for Latin America and the Caribbean will hold steady at slightly more than 1 percent.

Werner says the recession in Venezuela will lead to worsening shortages.