Confirmation that Venezuela's petroleum-reliant economy was slowing down before the global financial store took its toll on world oil production, prices and demand has come with the regular end-of-year bulletin from the central bank.
Preliminary estimates from the Venezuelan Central Bank (BCV) show that gross domestic product (GDP) expanded by 4.9% this year compared with 8.4% in 2007. Within this year's total, oil GDP rose by 3%, while the non-oil economic increased by 5.3%.
Economists say that the slowdown in economic activity was not necessarily a bad thing after GDP increases of 10.3% in 2006, 9.4% in 2005, and 17.9% in 2004, when the economy was climbing out of the worst recession on modern record in Venezuela. Post-slump high growth prompted warnings that the economy was in danger of over-heating. Economists drew gloomy portraits of an economy imploding and everything ending in tears. As it is, inflation continues to plague the economic outlook. The BCV calculated the "inflationary cost" at an accumulated 27.6% in the 11 months up to and including November. This compared with 22.5% during the whole of 2007.
Finance Minister Alí Rodríguez Araque recently lifted the official inflation forecast for this year to "about 30 percent." Private sector economists say this is "just for starters" and that the real outcome will probably be somewhat higher. That, they add, assumes that the official index issued by the National Statistics Institute (INE) "reflects reality", which is in doubt because of the doctoring done by the INE to include Mercal food prices not generally and widely available.
As has long been the case in Venezuela during the good times, economic growth was led by oil, where production rose by three percent this year. Latest figures from the International Energy Agency (IEA) show that Venezuelan production began to reflect the global downturn in November. The IEA, which like the Organization of Petroleum Exporting Countries (OPEC) tends to put Venezuelan production at levels lower than the government and the state oil corporation, Petróleos de Venezuela (PDVSA), estimated overall Venezuela output at 2.35 million barrels a day (bpd) last month. This was unchanged from October but slightly down from 2.37 million bpd in September, when PDVSA and the government were still claiming that overall Venezuelan production was running at anything up to 3.1 million bpd. The variance between the official version of events and what everybody else thought was actually happening has never been explained. Inevitably, the gap prompted suspicions that officials were inflating the figures for some reason or other. It's now been quite a time since officials including Energy and Oil Minister Rafael Ramírez (who doubles up as PDVSA president) talked up the output estimates.
Outside the all-important oil sector, non-oil GDP expanded by 5.3% this year. The chief driving forces behind this were consumer demand, which rose by 6.4% compared with 2007, and state sector activity, which increased on the same measure by 5.7%. Overall, the country had a balance of payments surplus of nearly $4.16 billion in 2008, contributing to net international reserves of $37.35 billion, the BCV said. With oil prices now less than a third of their average for the year, that surplus is likely to evaporate in 2009.
Finance Minister Ali Rodriguez said Dec. 19 that the government is considering adopting different economic measures in response to the global financial crisis and is leaving no options off the table.
Chavez said in that regard Saturday that he plans to announce measures to mitigate the consequences of the world economic slowdown, including some aimed at reducing Venezuela's dependence on oil revenues, which account for roughly 90% of the country's export earnings.
No comments:
Post a Comment