Venezuelan President Hugo Chavez is still suffering complications caused by a lung infection he contracted in Cuba following cancer surgery there two months ago, Caracas officials reported.

"The breathing insufficiency that emerged post-operation persists, and the tendency has not been favorable, so it is still being treated," Information Minister Ernesto Villegas said in a televised statement.

Chavez, who returned to Venezuela from Cuba last Monday, remains hospitalized and was unable to meet with fellow socialist leader President Evo Morales of Bolivia this week because of his health.

“I wasn’t able to meet him, I was only able to meet with the head doctor and family, but my understanding is that they are very encouraged,” Bloomberg News quoted Morales as telling reporters in New York after his visit to Venezuela.

“Sometimes diseases, illnesses are difficult to fight,” Morales added. “You must understand that he’s gone through the most difficult moments of his life.”

Chavez, 58, was first diagnosed with cancer in 2011, athough the Venezuelan government has neither disclosed what type nor provided many details on the severity of his illness. He has traveled to Cuba periodically for medical treatment, undergoing four operations to date.

Chavez’s health has further declined following his re-election last October, and he has yet to be officially inaugurated for a new six-year term.

Due to Chavez's status as Venezuela’s pre-eminent leader since 1999, the uncertainty over an increasingly probable transition in leadership weighs heavily on the government of South America’s largest oil-exporting country.

In December, Chavez appointed Vice President Nicolas Maduro as his political successor. Under the Venezuelan constitution, new elections must be held should Chavez leave office during the first four years of his term.

Chavez, drawing funds from Venezuela’s nationalized oil industry, has implemented extensive social-welfare programs, providing universal access to health care and primary education while expanding public housing, which largely benefits the country’s poor and working-class majority.

Critics argue that Chavez has failed to reinvest profits back in the oil industry, leading to stagnation in production and a lapse in safety regulations.

In the run-up to the 2012 elections, the political opposition was careful not to push privatization of the oil industry and risk alienating many low-income voters, but it discussed diversifying Venezuela’s oil export-dependent economy to protect against swings in global prices and falling production, as well as to draw in increased foreign investment.

NPR’s Tom Gjelten recently said that foreign markets have been anticipating a departure of Chavez from power.

“The last few days have seen a rally in Venezuelan bonds,” Gjelten said on a radio program last month. “Some investors figure the Venezuelan economy would improve if Chavez were out of the picture. Whether that's a good bet is another matter.”

Another guest on the same program, Risa Grais-Targow of the Eurasia Group consultancy, said she is advising her clients not to be overly optimistic about the sudden opening up of Venezuela’s economy in a post-Chavez scenario.

“I think investors tend to really underappreciate the risks involved with a transition scenario, particularly given the country's deep political polarization and also the dire shape of the economy,” Grais-Targow said.