Let's discuss Venezuela's economic growth
19.11.04 | Today the Venezuelan Central Bank, BCV, issued its third trimester report. In it we find a few interesting things.
the GDP increase in comparison to the third quarter of 2003 (after the
devastating oil strike) is 15.8% when that last one had a 7.1% drop
respective to 2002. This would be very good on its face value. And
indeed things are going much better than one year ago. But let's be a
little bit more inquisitive in our lecture of the recent economic
The sector that showed the largest recovery was
construction, the one comatose since 2002. It increased in the third
quarter by a whopping 40.3%! How come? Well, in the purest of
Venezuelan political tradition, the government released a lot of cash
to build quickly popular housing that it could have built earlier. But
it makes for better photo-ops when the president himself goes to open a
few dozen subsidized housing here and there. Yet we can read that the construction sector is still 40% below its 2001 level, which was not that great to begin with.
good news, in large part due to the extraordinary electoral spending so
decried through this blog since early this year. General consumer
demand increased by 29.2%!!! And the jobless rate is still 14.5% and
the underemployed (street vendors and the like) is still hovering at
50%. No big change there. So how come people have money suddenly? Cash
grants from a mision or another?
Still the BCV is
careful and gives a 12% for the whole year in spite of such a gleaming
third quarter. Do they know something we do not know? Like a sudden
slow down in the 4th quarter?
Elsewhere we read that the increase in accounts balances towards a surplus is due to an increase of 37.1% of oil price. Yet the National Assembly issues a new debt emission of 500 million USD against the objections of the BCV!
And from CEDICE with have a Cassandra voice announcing that the current oil plenty has a déjà vu feeling all over again.
And to reassure your doubts about the good management of the country, the BIV, one of the two "commercial banks" which is state owned, has a bad debt roll of 34.3%,
the highest within the Venezuelan banking system whose average is 2.4%.
That is, a whopping 1/3 of the loans issued by the BIV (many to
associates of the regime) are bad debt that probably will never be
recovered. Imagine that!
And supposedly we should cheer up the
GDP increase in the third quarter. One wonders what would that GDP be
if we had a better managed country and not the corrupt mess that we are
putting up with.
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