The Venezuelan economy remained in the same “solid” territory that President Chavez refers to, but this is solid negative, not solid positive, as GDP shrank -5.8% in the first quarter 2010. Of course, you have to believe Government statistics. I particularly find the number suspect, it is identical with 4Q09, when we did not have electricity rationing, lower CADIVI outflows and a devaluation.
But even if you believe it, it is absolutely horrible, at a time of world and particularly regional economies recovering strongly. The oil sector shrank by -5% and the non-oil sector by -4.9%. (Yes these two are incoherent, Quico has more on that) The private sector shrank by 6%, while the public sector contracted by 2.8%. Investment was down 27.9% (way to go Hugo!), exports declined by 8.1%. By sectors only Communications (+9.7%) and Government Services (up 2.8%) were positive. Manufacturing was down 9.9%.
There you have it, of course, in Chavez La La land, the Agencia Bolivariana de Noticias, the headline is different:
In any case, Venezuela is mired in stagflation, devil’s excrement, shortages and the systematic destruction of the country’s economy by XXIst. Century Socialism.The current foreign exchange crisis will only amplify the problem. Who will be blamed for all of this?
And reserves down to US$ 26.35 billion with two weeks of no alternative market.