Venezuelan Oil GDP has been negative for the last ten quarters

May 19, 2011

In the comments of the previous post there has been a lot of discussion about the data for first quarter GDP, which rose by 4.5%. Hey, it’s positive, but it is nothing to gloat about. GDP is measured in a very quirky way, it measures the growth in the 1Q11 (first quarter 2011) when compared to 1Q10 (first quarter 2010), thus it is not sequential. Thus, the 4.5% growth has to be compared with the 5.1% contraction one year ago, due largely to the electrical crisis.

Thus, compared to a year ago, the Venezuelan economy is still below two years ago, and below the last quarter of 2010, nothing to hold a press conference for like Giordani and Merentes did and all the money they spent printing gloating references to this non-achievement.

But the most worrisome part of the report is this graph from El Nacional, which shows how oil GDP has done for the last thirteen quarters. As you can see oil GDP has been negative for ten quarters now, a true cause for concern in the country where The Devils’ Excrement dominates the economy. And since Giordani loves to talk about “trends”, the “trend” in the graph above, compiled by El Nacional, shows that oil GDP topped near zero and seems to be heading back down.

In another funny twist, a UCV economist (Garcia Banchs) found some “funny” numbers in the GDP data and they have been altered three times since the GDP report three days ago.

Oh! The revolution!

33 Responses to “Venezuelan Oil GDP has been negative for the last ten quarters”

  1. Kepler Says:

    Can you give clarify what Garcia Banchs did?

  2. moctavio Says:

    He started tweeting about some numbers that were inconsistent, even showing graphs. Then he tweeted yesterday that they had been changed three times since the report of the GDP numbers (and there were still inconsistencies). I could not find in Twitter original plots, but I am sure he will write something about it.

  3. NorkseDiv Says:

    Is the oil GDP calculated in the same way quarterly GDP is? So there has been a 11.2% decline since first quarter 2008? That’s pretty bad. I thought Chavez had increased investment in oil production… did this happen at all or was it all empty rhetoric?

    Also this is OT but what is the cellphone network like there, can you get android phones and the like?

  4. moctavio Says:

    Yes, it is all measured relative to the same quarter last year. Investment in oil production has not increased and production activity has gone down.

  5. Gordo Says:

    I’m just wondering how the devaluations and inflation influence these numbers.

  6. someone Says:

    These numbers look to me as shattered as the official numbers. What is a oil gdp? Something that wants to take oil revenues into account, but what the metholodigy, it seems as well all whizzy whizzy…


  7. Oil GDP measures activity in Venezuela, not revenues from exports. The less you invest or produce, the smaller the GDP even if the export price goes up 30%.

  8. Potemkin Country Says:

    Perhaps some of you have noted that chavista douchebag officials in the recent have in the recent past made peculiar comments/acts, i.e., Europe is in crisis, the U.S. is a dangerous country to live in, Venezuela is the happiest place on earth, GDP calculations as capitalistic, control of “bad” news in the media, etc. etc.

    I guess their strategy is, through propaganda, convince their poor devil voters that Venezuela is (at least relatively) a developed country, where everything works perfectly and that in fact, the rest of the world is comparatively better off… thus… Voilá! we arrived to the sea of happiness before 2021! The commander fulfills his promises!

    As to how this Potemkin country compares to the daily toiling and hardships Venezuelans endure, is another question. But, again, for chavista douchebags the future is too far away, and the real goal is to keep power for another day.

  9. A_Antonio Says:

    This is out of the post, but I find very disgusting the support from Chavez and PSUV to the dictator (with the title of butcher, assassin and terrorist) of Syria.

    At least, in this case he does not has the excuse like Khadafy that occidental world also tolerate the dictator of Syria and have some kind of diplomatic relationship, more than try to avoid a war with Israel. Everybody knows who they really are.

  10. albionoldboy Says:

    “This is out of the post, but I find very disgusting the support from Chavez and PSUV to the dictator (with the title of butcher, assassin and terrorist) of Syria.”

    That’s because Chavez sees Assad as his future self, when he has to start killing Venezuelans (en mass) to keep power.

  11. George Best Says:

    HI – you better ALL have a look on the following link/speech – AS ALWAYS
    O N L Y the “Gringitos” do understand such stuff AND are outspoken on SUCH STUFF…

    The Eurpeans are hopeless on such issues…

  12. Kepler Says:

    George,
    What are you talking about? What links?

    It’s “Gringuitos”. You better start learning Spanish and Chinese…Spanish because most people in the US will speak Spanish very soon and Chinese because China owns the US already.
    Be outspoken as much as you want.

  13. killroy Says:

    Hey Kepler, when where you in the US last? You speak with such authority about the US and everything your distinguished mind gets involved in.

  14. A_Antonio Says:

    I expect that USA made soon something about its debt because soon will be called United States of China. China is the principal holder of USA debt. The other in Japan, but very soon will sell it to China to pays the damages of the earthquake.

  15. Kepler Says:

    Killroy,
    Recently. I know only about 12% speak Spanish for the moment. So: don’t take it so seriously. Cool down. Still: things are going to change and the percentage is going to grow and grow and grow.

    Regarding China and the US: well, that is not a joke. That is very much correct.

  16. George Best Says:

    I am sorry – here we are:

  17. George Best Says:

  18. Kepler Says:

    George,

    That video is tacky. There are truths there mingled with unleft pieces, half-truths.

    You obviously don’t read the European press (and no, Europe is not just English-speaking Britain or Ireland). I do. Most of it is actually highly critical of Chávez, but in such a way that tends to be more credible than that video, which is similar to the videos sent about Saddam Hussein’s WMD.

    I am one of those Venezuelans who signed against Chávez and I actually helped in looking for more signatures in one of the most dangerous municipalities in my region in 2004. My whole family is also very active against Chávez. The last thing we need are people like that bloke. He should stick to his state. He can only help Chávez with whatever he does.

  19. George Best Says:

    Hi again,

    look MY FRIEND – I don´t think this video is “tacky” (pegajoso) I believe it´s typically american senador or whatever title he has – BUT it´s the truth and
    OUTSPOKEN and everybody should be delighted that somebody does SAY what is really behind this guy – yes I DO READ all major newspaper in 3 (three) main languages of of this world e v e r y bloody day since 30 years and “highly critical” about Chavez is just not enought because in Europe they ONLY and EXCLUSIVELY are worried about no to RISE the gasoline prices by one cent more and therefore they don´t touch the main issue´s with our friend…
    believe you me WE A L L NEED MANY MORE OF THOSE “BLOKES” because with the venezuelan connection or opposition we will not reach tyhe next corner…

  20. Kepler Says:

    “yes I DO READ all major newspaper in 3 (three) main languages of of this world e v e r y bloody day since 30 years and “highly critical” about Chavez is just not enought”

    Hehe…sure. You reads them all? And you language English? All them newspaper?
    Yo yo ma! You better than Palin!
    End of discussion.

    Miguel,

    I see an oil increase of about 20-30% for the last years. Price hikes need to be always higher to just get a GDP growth. It would be interesting to model possible scenarios for different oil price projects based on the last 10 years and some “wild guesses”: oil goes up 20% this year (compared to 2010) and 20% on 2012, oil goes up “just” 10% and 10%, etc.

  21. Leo Says:

    Just Incredible, Oil Prices soaring, Latin American economies booming and my country in the worst economic and social shape I’ve ever seen. Venezuelans open up your mentality and wake up to reality !!! Your children will appreciate your fight.

  22. BruceCarson2008 Says:

    Kepler you sound like a real apologist for the Oligarchs and rich who exploited venezuela for so long. You want to see a real success check out Socialista Areppa that is the model for economic development in the future, i think private profiteers will be run out of the food service industry in Venezuela, just watch!

    Also America won’t be owned by China… they are in a mutual dependency. China needs the US to run a budget deficit to keep the Yuan week otherwise they would have no way of getting rid of excess dollars. Its the same situation Japan was in except China can’t afford to adjust out of it because it would result in massive unemployment. On the subject of Spanish in the US well thats highly overblown by paranoids on the right wing, there are far fewer spanish speaking people in the US today than there were Germans in America… the largest single ethnic group in America is German! And Germans spoke German at home for multiple generations unlike Spanish speaking immigrants where nearly none (less than .1%) attend Spanish speaking schools and within one generation over 50% primarily speak english at home. The propotion of people who speak Spanish will quickly drop without a constant influx of immigrants, which won’t happen given the dropping birth rate of Mexico.

    Its funny how you see this same Meme though from both the far right in America like Tom Tancrado and many who live south of the border… its odd.

  23. BruceCarson2008 Says:

    To be clear the adjustment between the US and China wont be pretty but there has never been a case of a country being owned due to too much foreign debt, certainly not a country a first world country. Japan actually has far more debt than the US as a percent of GDP. But the US (unlike Japan) is actually serious about reducing that deficit… what I worry about more is Chinas social stability when the Yuan really starts gaining against the dollar and US consumers stop buying Chinese products in such quantity.

    Actually I hate to admit this but the kind of direct loan like the 20 Billion Chavez got from China actually does more damage to your sovereignty than US treasuries being held by other countries, such direct loans are conditional and government to government and that gives China real power in Venezuela. Chavez should have focused on expanding exports to get foreign currency instead that was a real mistake.


  24. Saying Chavez should have focused on expanding exports is like saying Chavez should not have been a socialist, he has never even paid attention to the problem nor has he even tried. On the contrary, he has destroyed Venezuelan industry (including oil) and carried out a nutty import policy where he imports at the official rate to “contain” inflation.

    BWT it is not $20 billion is over US$ 30 billion by now, there is the China fund and the China loan.

  25. Kepler Says:

    Miguel,
    I am not a socialist, but I still insist: the guy is so bad that he is not even good to be a staticist socialist. He is just a military caudillo with a Banana Republic mentality who cannot even tackle the few things socialists of any shade or colour tackled.
    It would be hard, very hard, for most people to really screw it up so badly as Chávez given the resources he has had at this disposal, something even corrupt and incapable CAP I during the Venezuela Saudita did not have.

    Bruce,
    We have talked extensively about the China deals (among many others) and recognised what a disaster that was and will be for Venezuela.

  26. BruceCarson2008 Says:

    What about the reduction of the Gini coefficient obviously Chavez has brought much greater opportunity to the lowest classes otherwise why the reduction in inequality?? It was .48 now it is .40! Maybe Chavez made a number of mistakes in the past but you must also credit his accomplishments.

    I think we should look at what Chavez did right so we can emulate it. Also the reduction in oil production saves more for the future and is good for the environment.


  27. Sure, you manipulate statistics and you get anything you want. How long can you keep the imports at Bs. 2.6? Or gas free? It is all artificial and there will be a day of reckoning with the economy.

    But, has healthcare, water services, sewage, roads, crime improved? Quality if life is down, Gini is down. Sure, tell me another story.

    No

    Please, with the oil windfall things should be MUCH better and the day this thing explodes, the GINI will soar.

    The reduction in oil production is the worst thing that can happen, Venezuela needs to get the poor out of poverty as soon as possible not in 50 years, but Chavez will not do it. We need propserity,. not promises.

    Accomplishments , sure, in your mind.

  28. GeorgeS Says:

    Which accomplishment:

    1) Crime tripled
    2) Inflation running at 25-30% a year, with salaries not keeping up
    3) Malnutrition and infant mortality on the rise
    4) Less housing in his best year than any year under the previous Government
    5) Electric Crisis
    6) Destruction of PDVSA
    7) Destruction of the manufacturing base of the country.
    8) Most corrupt Government in Venezuelan history
    9) No Judicial autonomy
    10) Disregard for human rights
    11) Destruction of the country’s educational and scientific system
    12) Destruction of morals and Ethics
    13) Rampant drug trafficking with military involved

    Should I go on?

  29. A_Antonio Says:

    100% agree with GeorgeS, one of the most desolated accomplish of Chavez, is what I felt few days ago, when the last venezuelan born of my family get a bachelor degree in USA.

    15 years ago, nobody in my family think in leaving the country and that all its generation born in Venezuela, of a immigrant family, that work hard and development two generations of children born in Venezuela, all them leaved already the country and not have any intention in return. Some few maybe will come visit the sites they grow, only to recall memories. But they are very certain there is no future for them in Venezuela, and the country does not have future with Chavez.

  30. loroferoz Says:

    “What about the reduction of the Gini coefficient obviously Chavez has brought much greater opportunity to the lowest classes otherwise why the reduction in inequality??”

    GO ask anyone in Venezuela with a monthly income of less than say, 10000 BsF. a month, if they perceive that their living standards have improved. If rent, housing, food, etc. prices have gone down. If their salaries have really gone up. If they can manage to raise a family.

    Expect two earfuls. GINI, and other numbers calculated from the Bolivarian government’s data are just a tad more trustworthy than Soviet statistics. As for the Arepa Socialista, the private “profiteers” are not running scared. The stillborn cause no fear, but pity.

  31. Kepler Says:

    Bruce,

    I haven’t seen a single parameter where one could say Chavismo has done anything better…perhaps the new laws on native American arts and crafts would be something, but other than that it has been either same pattern or much much worse.
    As for the rich who before were exploiting people: do you think it has changed? It was bad and now it is worse.

    Even some of the very worst scum of the “IV Republic” are not only in the new government but have been key elements of that new government, specially chosen. Check out the profile of people such as Rodríguez Chacín and Freddy Bernal.

    Even child mortality…for one I would like to be wrong, but I am not.
    Chavistas take things like “look, before it was X% and now it is X-Y%.
    Well, even in the best examples they have, if you examine the whole thing with a context you see they did nothing special.
    Take this
    I don’t put all the data, but that is based on their own statistics. The rate of improvement has been basically the same in spite of having several times the amount of money the governments in the previous 13 years had. And that has been one of the best things.

    Literacy? Don’t get me started. Don’t get me started. They have blocked a project for education and poor children where I spent a lot of time in just because it was carried out by the opposition. Those guys are really miserable.

  32. Kepler Says:

    There is just one error in that chart. It should read child mortality, not birth mortality. The data is taken out of INE.

    The regime also analyzes things like inflation: “oh, we have lower inflation than the 4th Republic”. Wrong. 1) inflation is only “lower” compared to the last years of the IV Republic, it is even higher if you compare the average for the 13 years and then you also see that in the nineties several Latin American countries had much higher inflation rates than Venezuela, whereas now Venezuela stands very alone on inflation.


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