Economy of Venezuela

This article provides information on the economy of Venezuela .

The Venezuela is a country located at the north of the South America.

Outline of the economy of Venezuela

The economic main activity is the exploitation and the refining of the Pétrole for export and the domestic consumption. The oil sector dominates the economy with about a third of the GDP, 80 % of the benefit to export, and more half of the incomes of the Government. Oil is the natural resource most abundant; it is treated by the national oil company PDVSA since 1975. Its official exploitation begins as of 1875 in the state of Táchira. Starting from 1922 begins the oil exploitation with large scales, starting many events which will change the walk of the country. It is, inter alia, on the initiative of Venezuela which OPEC was founded.

Crude oil reserves of Venezuela

See also: Reserves crude oil of Venezuela

oil Areas in South America, Central America and Antilles#Venezuela

The years critics 1999-2003

Whereas the average rate of growth of GDP PPP (purchasing power parity) in the world between 1990 and 2002 was of 57%, the Venezuela is one of the rare countries where this one dropped while passing from 6 169 dollars per capita in 1990 with 5 380 dollars in 2002 and 4 740 $ in 2003.

In 1999 the nation's economy had regressed of 7,2 %. An oil slump in prices during first half of the year had accelerated the recession, and had forced the government of Chávez to subject to the decision OPEC to reduce the worldwide production in order to make go up the course of the barrel. The increase of the oil courses during second half of 1999 made it possible to reduce the pressure on the national budget and the currency - the Bolivar . In 2001, the growth of the Gross domestic product or GDP was of 2,7%. A significant growth of the international prizes of oil made it possible to leave the economy the strong recession undergone during the year 1999. The relatively weak nonoil sector, an intense escape of the capital and a temporary fall of the oil prices prevented that recovery is stronger.

From 2002 one changed the mode of the exchanges, passing from a mode atfloating rate free towards a mode withfixed rate controlled by the government, which made depreciate the currency considerably, the Bolivar. In 2003, consequently of an important political instability maintained by the anti-chaviste opposition, of various social conflicts and the general strike of principal oil company PDVSA, the economy vénézuélienne undergoes a strong fall of its GDP of about 8%.

Rectification since 2004

During the year 2004, thanks to the raising of prices of hydrocarbons, Venezuela knew a growth rate of the GDP of 17% (one of highest of the world, according to the official figures and those of the IMF), making it possible to recover the former vexations almost completely. The realization of the presidential revocatory referendum, with the triumph of president Chavez supported by 60% of the votes, has affected the economy. Social investments of the government (by the means of the " misiones" ) in the educational, food and médico-medical fields, did not succeed in increasing the quality of life of the citizens to the weakest resources (70% of the population). It remains to be seen whether the government decides on the economic policy to follow.

March 3rd, 2005 the currency was devaluated vis-a-vis the American dollar, official foreign exchange rate passing from 1.920 has 2.150 bolívars per dollar. In 2005 Venezuela presented an adverse balance of exports not-traditional (C. - with-D. except oil) compared to that of imports. In general, Venezuela is a country which depends on the imports, including the basic food products. Finally the international reserves reached the order of 25 billion dollars in 2006, to place itself at 29 billion dollars in 2007. The government with fact of only lowering the reserves of a blow of 12 billion dollars during one six months time. With the high prices of the oil products (the produced main thing of export) and the new oil policy that the government sets up, one envisages for the next years a great social and economic disaster: the phenomenon of hyperinflation, the dolarisation of the economy, and the devaluation of the Bolivar, are inter alia the scenarios to come if the new Constitution suggested by Chavez is approved.

September 30th, 2005, Chavez announced that Venezuela withdrew its reserves of foreign currencies of the US banks to place them in Europe.

Venezuela finished 2005 with a growth of the saving in 9,4% of the Gross domestic product. However, the international experts in economy estimate that the request accounts for 20%, therefore the growth of the economy bases themselves only on the public expenditure and the consumption of the private sector, which explains the phenomena observed of gold and already. Inflation is considered at 17%, highest of the continent, according to the figures of the " Central bank value of Venezuela" (BCV) and of the CEPAL.

Dated April 21st, 2006, international monetary reserves reached 31.648 million US$. November 17th, 2006, one announced already 35.102 million dollars of reserves.

But this growth is of bad quality according to several economists, it is especially with the increase in the public expenditure which exceeds one the third of the GDP into 2006 which at sight inflation with increased and last the 15%.

The advertisements of president Chavez at the beginning of January 2007 concerning Re Nationalization of the companies of telecommunications and electricity (privatized since approximately a decade), the end of the independence of the central bank and a socialist revolution made fall the purse of Caracas of 19% on January 9th, 2007.

The April 30th 2007, Hugo Chavez announces the withdrawal of Venezuela of the the IMF (whose country refunded all its loans advances some thanks to the money re-entries due to the oil exploitation) and of the the World Bank. He also announced the day of before the Latin America in general would go better without the World Bank and the IMF, supported by the United States .

Forecasts for the near future

One provides that the economy vénézuélienne will record an increase of about 6% at the end of 2006, being given the strong increase in oil prices, rate that in the area only Argentina will exceed with 7,3%, this according to the forecasts (April 2006) of the Funds International currency published by UNO.

Inflation with doubled while passing to 14,3% in January 2007.

Finally on May 17th, 2006, the Central bank of Venezuela announced good figures for the first quarter 2006, namely:

a progression of 9,6% for this quarter; it is the 10th consecutive quarter of progression.
Including 10% of progression for the nonoil activities.
Construction + 21,2%.
Trade + 21,0%.
Manufacturing industry + 9,4%.
metal Productions + 37,7%
Machines and equipment + 41,3%.
the total request increased by 10,1%
private Consumer expenditure final in rise of 19,3%, those of the government of 9,2%
Enfin investments in fixed credits + 20,3%.

Source: Site Aporrea Venezuelan

November 16th, 2006, Central Bank vénézuélienne announced a growth of 10,2% for the third quarters 2006, this implying a very broad revision with the rise, for the growth of all the year 2006.

Source: Venezuela analysis.com

Companies

See also: List of companies vénézuéliennes

Statistics

GNP: 128 billion dollars (2005)
Growth rate: 9,3% (2005)
GNP per capita: 4810 $ (2005)
GDP by sector: (is. 2005)

Agriculture: 4,54%
Industry: 51.57%
Services: 43.90%

Share of the population living in lower part of the Poverty line: 15% (2005)

Income or household consumption expressed as a percentage:

the weakest 10%: 1.5%
10% highest: 35.6% (is. 1995)

Rate of inflation: 15.9% (2005)

Active population: 9,9 million (1999)

Active population by sector: (is. 1997)

Services: 64%
Industry: 23%
Agriculture: 13%

Unemployment rate: 15,3% (2004)

Budget:
Receipts: 26,4 billion dollars
Expenditure: 27 billion dollars (is. 2000)

Industries:
Oil, mines of iron, construction materials production, food industry, textile industry, production of steel and aluminum, assembly of engines of cars.

Growth rate of the industrial production: 0,5% (is. 1995)

electric Production: 106,48 billion kWh (2005)
distribution by source:

fossil energy: 25,46%
hydraulic power: 74,54%
nuclear energy: 0%
other:

Electricity consumption: 106,48 billion kWh (2005)

Export of electricity: 0 kWh (2005)

Importation of electricity: 0 kWh (2005)

Agricultural production:
corn, sorghum, cane sugar, rice, bananas, vegetables, coffee, ox, pig, milk, eggs, fish.

Exports: 55.5 billion dollars (2005)
oil, bauxite, aluminum, steel, chemicals, manufactured goods simple (1998).

Partners with export (1999):

the United States and Puerto Rico: 57%
Colombia, Brazil, Japan, Germany, Netherlands and Italy

Imports: 11,8 billion dollars (1999)
Raw materials, material and mechanical equipment, transport facilities, construction materials.

partners with the importation: (1999)

the USA: 53 %
Japan, Colombia, Italy, Russia, Germany, France, Brazil, Canada.

Foreign debt: 20.8 billion dollars (2005)

Economic aid: -1,040 billion dollars (2005)

Currency: 1 Bolivar (Bs) = 100 Centimos.

Foreign exchange rate:

1$ = 2150,00 Bolivars (March 2005)
1$ = 652,333 Bolivars (January 2000)
1$ = 605,717 Bolivars (1999)
1$ = 547,556 Bolivars (1998)
1$ = 488,635 Bolivars (1997)
1$ = 417,333 Bolivars (1996)
1$ = 176,843 Bolivars (1995)

Financial year: calendar year.

References

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