Latin American Herald Tribune
Caracas,
Thursday
November 18,2010
CARACAS – Venezuela’s economy shrank 0.4 percent in the third quarter compared to the same period last year, the central bank reported.
The country’s gross domestic product declined 5.2 percent in the first quarter and fell by 1.9 percent in the second quarter, while the cumulative contraction for the year’s first nine months totaled 2.4 percent, the bank said Tuesday.
Venezuela’s GDP shrank by 3.3 percent in 2009, while the value of goods and services produced by both the public and private sectors fell in the third quarter of 2010, down 0.1 percent and 0.7 percent, respectively, the institution said.
President Hugo Chavez’s government forecast in its 2011 budget – submitted to the unicameral legislature last month – that the Venezuelan economy will pull out of recession in 2011 and grow at a rate of 2 percent.
That would mark an end to economic woes stemming from the 2008-2009 global recession and an accompanying sharp drop in the price of crude – Venezuela’s biggest foreign currency earner – and set the country back on the growth path it had been on in the five years prior to 2009.
The Venezuelan economy grew 4.8 percent in 2008, 8.4 percent in 2007, 10.3 percent in 2006, 9.4 percent in 2005 and 17.9 percent in 2004, when the country emerged from a severe recession.
The central bank’s report said domestic oil production declined 2.1 percent in the third quarter of 2010, “the product of lower output of crude and refined products, primarily resulting from international market behavior and production agreements in place since 2009.”
Non-petroleum activities, meanwhile, fell 0.2 percent in the third quarter, with the sharpest declines coming in the mining sector, down 10.6 percent; construction, off 7.9 percent; and electricity and water services, which fell 7.8 percent.
By contrast, the fastest-growing sectors in the third quarter were telecommunications, up 9.4 percent; education, health and defense, which rose 3.2 percent; and transportation, which climbed 2.7 percent.
Export revenue – mainly from oil, which accounted for 90 percent of the total – came in at $15.4 billion, while Venezuela spent nearly $10 billion on imports, the quarterly report added.
Referring to the 1.9-percent GDP decline in the second quarter, Chavez said in August that it marked a “significant recovery” following the 5.2-percent drop in the first three months.
The socialist president also scolded his critics for suggesting the GDP decline was even greater and accusing the central bank of manipulating the data.
