Venezuela GDP falls 5.8% in first quarter
http://english.eluniversal.com/2010/05/26/en_eco_esp_venezuelas-recessio_26A3908297.shtmlThe report issued by the Central Bank of Venezuela (BCV) at the end of the first quarter of 2010 clearly shows that economic downturn has not slowed down, and that the historical link between high oil prices and growth is blurring.
By comparing the figures issued by the BCV with the data recorded in the first quarter of 2009, the average price of the Venezuelan oil basket dramatically recovered by 85 percent to USD 70.5. However, the economy shrank 5.8 percent and declined for the fourth consecutive quarter.
Virtually all the engines that can boost the economy are off. Private consumption declined 5.9 percent; investment plummeted 27.9 percent; government spending fell 0.2 percent. The only positive figure was the increase of Venezuelan exports (70.9 percent) thanks to the recovery of oil prices.
The BCV report shows the impact on key areas for wealth and employment creation: manufacturing declined 9.9 percent; trade (-11.6 percent); construction (-7.8 percent), oil sector (-5 percent). On the positive side, communications jumped 9.7 percent and community services increased by 2.8 percent. The Central Bank of Venezuela attributed the negative results in the first quarter to the "temporary discontinuation of access to foreign currency for imports of goods and services, lower domestic aggregate demand from consumers, reduced investment and the effects of environmental conditions that forced the government to implement a power rationing plan aimed at ensuring rational and equitable use of electricity."
Although the Central Bank of Venezuela conceded that the economy was affected by exchange shortage, the Foreign Exchange Administration Commission (Cadivi) said on April 15, through a press release, that in the first quarter of this year it allocated a total of USD 5.42 billion for imports, an 11 percent increase over the same period of 2009.