Venezuela economy shrinks 5.8% in the fourth quarter

[pampango]

Source: BBC

The Venezuelan economy shrank by 5.8% in the last three months of 2009 compared with year earlier, the country's central bank has announced. For the whole of 2009, the Latin American economy shrank 3.3%.

The bank blamed the contraction on the global economic crisis and "the weakness of the price of oil and output reductions" set by producer group Opec. Venezuela relies heavily on revenues from its oil reserves for its economic growth.

The country's economy shrank faster in the final three months of 2009 than in the previous quarter.

"Venezuela did better than most countries at the beginning of the global recession, but now it's in greater trouble," said Juan Pablo Fuentes at Moody's Economy.com. Economists expect the economy to record very low growth in 2010.

Read more: http://news.bbc.co.uk/2/hi/business/8546650.stm

[Joanne98]

1. More Chavez bashing!

[protocol rv]

4. It's going to get worse

I don't see how Venezuela can have economic growth in 2010. The power cuts are having a bad effect on business' ability to work properly. I heard they are now forcing many businesses to stop their air conditioners and machinery for part of the day. This of course reduces productivity.

To make things worse, oil production is dropping, and there's very little activity to reverse this decline. There's a lot of talk, but not enough is done in the fields.

And the wave of nationalizations make it very hard for private industry to justify investment. This is why I am surprised to see anybody predict any growth at all. Many experts predict instead a drop in GDP of about 3 %. I think it will be more around 4 % because the economists have failed to include the effect of the power cuts.

[anigbrowl]

5. It's not 'bashing' to simply restate the financial news

There's no editorializing in the article, it just describe's the country's current economic situation without attributing responsibility for that to any specific policy or person. The worst conclusion you could draw from this report is that Venezuela's economy might be overly dependent on oil exports and should be more diversified.

[WriteDown]

2. Predictable...

All dependent on oil revenue.

[bemildred]

3. Are these the same guys that always expect wrong when unemployment goes up? nt

[protocol rv]

6. We expect economic recovery when oil is $80 per barrel

Alas, inflation rages, and the economy is going down. Please tell us, do you think we should vote the bums out of office in September?