CARACAS Venezuela's opposition refused on Friday to approve President Nicolas Maduro's "economic emergency" decree in Congress, saying it offered no solutions for the OPEC member-nation's increasingly disastrous recession.
Underlining the grave situation in Venezuela, where a plunge in oil prices has compounded dysfunctional policies, the International Monetary Fund forecast an 8 percent drop in gross domestic product and 720 percent inflation this year.
"The people voted for a change, not a failed communist model," said Elias Mata, vice-president of a commission analyzing the decree at the National Assembly which the opposition won from the ruling Socialists in a December vote.
Maduro's decree, issued a week ago, envisaged wider executive powers to control the budget, companies and currency. But the opposition says he already has sufficient powers and Maduro is the real problem.
The assembly voted against the decree by 107 to 54.
The opposition has vowed to find a legal way to remove Maduro, via resignation or referendum, by mid-2016.
With Venezuelans furious at runaway prices and long lines for scarce products at supermarkets and pharmacies, the government blames an "economic war" by foes as well as the oil price fall.
Maduro, 53, a former bus driver and foreign minister who succeeded his mentor Hugo Chavez in 2013, blasted the opposition for their position on the decree.
"I'm very sorry the National Assembly is turning its back on the country ... They prefer shows and confrontation," he said.
Venezuela depends on crude for 96 percent of hard currency revenue, but the money its oil fetches has plunged to under $22 a barrel, the lowest in more than 12 years. Imports have plummeted, leading to shortages, but the state has honored debt payments.
With about $10 billion in foreign debt due during 2016, markets are jittery about a possible default, particularly at the back end of the year when the heaviest payments are due.
The IMF said "policy distortions" have combined with the oil price drop to create an expected 18 percent economic contraction over 2015 and 2016, the third-sharpest in the world. Prices rose 275 percent in 2015, the highest rate in the world, it added.
At a meeting with non-oil exporters, a relatively small sector compared to the massive crude industry, Maduro granted their longstanding request to sell dollar revenues at the weakest official exchange rate of 200 bolivars.
Compared to the previous rate of 52, that was an effective devaluation of 74 percent to the benefit of companies involved.
(Additional reporting by Eyanir Chinea, Diego Ore and Corina Pons; Editing by James Dalgleish)