Economics &
Finance
Economy grew 5.5% in 2012
Nelson Merentes, President of Venezuela's Central Bank reports
that gross domestic product (GDP) is expected to grow 5.5% by the end of the
year, above the level estimated in the budget for fiscal year 2012. The
strongest sector was construction sector with 16.8% growth which is 1.2% of
total GDP. Expansion in this sector is attributed to the Great Housing Mission.
(El Universal,
12-27-2012; http://www.eluniversal.com/economia/121227/central-bank-venezuelas-economy-hikes-55-in-2012; AVN, http://www.avn.info.ve/contenido/gdp-grew-55-2012)
Merentes calls inflation a problem
Central Bank President Nelson Merentes says that although
price increases have slowed down, "inflation
continues to be a problem for the economy", and calls for an increase
in public and private production, as well as more efficiency in food
distribution. This year's inflation goal had been projected between 20- 22% and
year to date inflation was 18% by November: Final results for the year have not
been announced. More in Spanish: (El Universal; http://www.eluniversal.com/economia/121228/merentes-admite-que-la-inflacion-es-una-dificultad)
Inflation reported at zero for 19 controlled
items
Inflation was zero for 19 items controlled by the
Superintendent for Fair Costs and Prices (SUNDECOP) since April 2012, which
includes basic bathroom, cleaning, and drink products. Karlin Granadillo, head
of SUNDECOP says the consumer price index (CPI) dropped by 13% last April on 19
controlled products, and there was no change in prices for the remainder of the
year. She claimed that increasing prices due to alleged devaluation is just
speculation. (AVN, 12-26-2012; http://www.avn.info.ve/contenido/inflation-rated-zero-19-regulated-items)
Domestic debt service projected at
U$D 22 billion in 2013-2014
Information from the Planning and Finance Ministry shows
that total debt service payments in 2013-2014 will be U$D 33.9 billion, 65% of
which (U$D 22 billion) is domestic debt, which has risen by 306% from U$D 14.1
billion at the end of 2008 to U$D 57.3 billion by September 2012. (El Universal, 12-25-2012; http://www.eluniversal.com/economia/121224/venezuelas-domestic-debt-service-at-usd-22-billion-in-2013-2014)
Difficulties in acquiring FOREX and
obtaining raw materials hit manufacturing
Central Bank figures show Venezuela's industrial sector
has had a constant lackluster performance, and lags behind production levels
recorded in 2008. The future looks bleak, with looming stagnation due to
difficulties in obtaining foreign exchange and raw materials. (El Universal, 12-27-2012; http://www.eluniversal.com/economia/121227/obstacles-to-buy-us-dollars-and-raw-materials-lash-manufacturing)
Banking intermediation dropping
Banking is among the best performing sectors this year,
with real annual profits increasing equity by 30%. However, intermediation has
been under 55% throughout the year, and dropped to 50.88% in November,
according to the Banking Superintendent's office (Sudeban). (El Universal, 12-26-2012; http://www.eluniversal.com/economia/121226/banking-intermediation-lashed-by-matured-bonds-payable)
Government extends standing ban on
workforce reduction to all of 2013
The Government has again extended the standing ban on
dismissing public and private sector employees to all of 2013. Under current
rules no worker can be fired without just cause previously approved by a local
Inspector from the Labor Ministry. More in Spanish: (AVN, 12-28-2012; http://www.avn.info.ve/contenido/gobierno-nacional-extiende-inamovilidad-laboral-durante-todo-2013;
El Universal, http://www.eluniversal.com/economia/121228/decretan-inamovilidad-laboral-durante-todo-2013)
49.4% of all unemployed are aged
24-44
Historically, the youngest population (Age 15-24) has
been the hardest hit by unemployment. However, official data shows that in
November those aged 25-44 faced more difficulties getting a job. According to
data from the National Statistics Institute (INE), some 873,513 were unemployed
last month, of which 431,411 (49.4%) were aged 25-44. (El Universal, 12-26-2012; http://www.eluniversal.com/economia/121226/out-of-the-total-unemployed-494-are-aged-24-44)
Government seeks to consolidate a communal
system in 2013
Although little progress has been made in implementing a
system that calls for communities to take part in producing goods and services
- so little that in October President Chavez showed his disappointment and even
threatened to eliminate the Ministry of the Communes - government and party
leaders continue to call for full implementation during 2013. (El Universal, 12-26-2012; http://www.eluniversal.com/economia/121226/venezuela-aims-at-consolidating-the-economic-communal-system-in-2013)
Venezuela stock market up 298%
After rallying sharply in the week ahead of the Gubernatorial elections,
Caracas stocks lost 1.9% the week ending December 21 to close at 465,336 on
little volume. Only four stocks changed price: Mercantil Servicios Financieros
A lost 3.6% at Bs. 135, while the class B shares lost 4.3% at Bs. 135. Banco
Provincial lost 0.6% at Bs. 164, while CANTV was the only gainer, rising 0.6%
at Bs. 17.1. (Latin American Herald Tribune, 12-24-2012; http://www.laht.com/article.asp?ArticleId=658459&CategoryId=10717)
Commodities
Domestic hydrocarbon market is plagued
by distortions and subsidies
Venezuela's growing domestic hydrocarbon market is plagued by distortions
and subsidies that show up in high demand and fitful supply. Neither the Petroleum
and Mining Ministry or state-run oil company PDVSA provide in-depth reports on
the size of the domestic market during 2012, but a few weeks ago, PDVSA's
chairman, Rafael Ramírez, remarked that gasoline demand is at 298,000 barrels
per day (bpd) and that this year the power sector's demand has been tremendous.
(El Universal, 12-27-2012; http://www.eluniversal.com/economia/121227/venezuelas-oil-domestic-market-accumulates-distortions-and-subsidies)
International Trade
Venezuela will comply with MERCOSUR
trade agreements next month
Trade Minister Edmée Betancourt reports Venezuela has
reached tariff nomenclature agreements within MERCOSUR and had moved ahead in
reducing tariffs on several products. She reported firm agreements had been
reached with Argentina in 609 sensitive items and with Brazil on another 777
items. More in Spanish: (AVN, 12-28-2012; http://www.avn.info.ve/contenido/venezuela-acuerda-c%C3%B3digos-arancelarios-pa%C3%ADses-miembros-del-mercosur;
El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/3-acuerdos-arancelarios-con-el-mercosur-comenzaran.aspx)
Venezuela is Spain's main weapons
client
Venezuela was reported at the top of the list of countries buying arms
from Spain during the first half of 2012 and has held this position for two
consecutive years, according to Spain's Economy Ministry. From January-June,
Hugo Chávez's Government purchased U$D 217.54 million in weapons, which is
26.5% of total arms exports reported by Spain. (El Universal, 12-27-2012; http://www.eluniversal.com/economia/121227/venezuela-is-spains-main-buyer-of-weapons)
Logistics
& Transport
Guanta Port modernization reportedly
advancing
Port authorities report the Government has invested over VEB 70 million
through the Bolivarian Port Authority (BOLIPUERTOS), in order to improve
Guanta's port infrastructure, which include refurbishing docks and roadways
within the port, storage facilities, electric repairs, medical offices and
other facilities. More in Spanish: (Bolipuertos, 12-28-2012 http://www.bolipuertos.gob.ve/noticia.aspx?id=6559)
Politics
Chavez delegates administrative
responsibilities to his vice president
Hugo Chavez has delegated some administrative
responsibilities to Venezuela's vice president, allowing his close confidant to
make decisions related to the budget, expropriations and government debt. Chavez
passed on the duties to Vice President Nicolas Maduro on Dec. 8, three days
before the socialist leader underwent cancer-related surgery in Cuba. The
measure took effect Wednesday upon its publication in the Official Gazette.
(Fox News, 12-26-2012; http://www.foxnews.com/world/2012/12/26/venezuela-chavez-delegates-administrative-responsibilities-to-his-vice/#ixzz2GCF1CYfV;
El Universal, 12-26-2012; http://www.eluniversal.com/nacional-y-politica/121226/venezuelas-vice-president-bestowed-economic-decision-making-capacity;
Bloomberg, http://www.bloomberg.com/news/2012-12-26/venezuela-s-maduro-can-issue-debt-expropriate-assets.html; http://www.bloomberg.com/news/2012-12-25/chavez-gives-venezuela-economic-orders-in-christmas-eve-call.html;
The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuelas-chavez-delegates-administrative-responsibilities-to-his-vice-president/2012/12/26/c1270bd4-4f81-11e2-835b-02f92c0daa43_story.html)
Officials claim Chavez improving
after surgery
President Hugo Chavez is improving after a cancer
operation in Cuba and has started exercising, officials said on Monday, amid doubts
over whether the former soldier is in good enough health to continue governing.
Vice President Nicolas Maduro said he had spoken by phone with Chavez, who was
walking and doing exercises as part of his treatment. "We've gotten the best present we could get
this Christmas: a phone call from our commander president," Maduro
said on state television. Information Minister Ernesto Villegas said earlier in
the day that Chavez had "shown a
slight improvement in his condition," without providing details. (Reuters,
12-25-2012; http://www.reuters.com/article/2012/12/25/venezuela-chavez-idUSL1E8NO59620121225;
AVN, 12-25-2012; http://www.avn.info.ve/contenido/chavez-greets-venezuelan-children-thank-people039s-prayers;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=658652&CategoryId=10717;
Fox News, http://www.foxnews.com/world/2012/12/25/vp-says-spoke-with-chavez-who-is-up-walking/)
Cabello says he supports Maduro
National Assembly President Diosdado Cabello said he will
carry out orders from President Chavez, and added that "the opposition thinks that January 10th is
the day they will be rid of Chavez" and hope that "Diosdado and Nicolás are fighting. Let them
continue to believe I am going to disobey an order from the Commander - The
Commander was so clear and explicit, besides, orders must be followed by all
who call ourselves "chavistas". The Commander said that if for some
reason, any reason, he should become unable to lead, the Commander designated
comrade Nicolás Maduro, in the knowledge that the revolution will not be lost." More in Spanish: (El Universal, 12-28-2012; http://www.eluniversal.com/nacional-y-politica/121228/cabello-con-maduro-no-se-perdera-la-revolucion)
Chavez has spent 201 days in Cuba
and there has been no medical report
National Assemblyman Carlos Berrizbeitia charges that
President Chavez has spent 201 days in visits and rest in Havana due to cancer
treatment and that there has been no medical report. Berrizbeitia says the
President has made 11 trips to Cuba, made 6 requests to the National Assembly
for permission to leave the country, and has spent 106 days convalescing and 95
resting in Cuba. More in Spanish: (El Universal, 12-28-2012; http://www.eluniversal.com/nacional-y-politica/121228/chavez-lleva-201-dias-en-cuba-y-no-hay-informe-medico)
Colombia's Santos reaffirms support for
Chavez
Colombian president Juan Manuel Santos reaffirmed his
support for President Hugo Chavez, who is recovering after a surgery in Havana.
Santos called vice-president Nicolas Maduro, and expressed Colombia's
willingness to collaborate with Venezuela under any circumstance. (AVN, 12-25-2012; http://www.avn.info.ve/contenido/colombia039s-santos-reaffirms-support-chavez; El Universal, http://www.eluniversal.com/nacional-y-politica/121225/santos-gets-ready-to-attend-chavezs-inauguration)
Uruguayan president foresees a big
question mark for Venezuela without Chávez
Uruguayan President José Mujica says he cannot provide "a sensible, categorical answer"
about what may happen in Venezuela if Hugo Chávez does not recover from cancer.
Mujica stated that he rather has "questions"
regarding the future of the country in the event that the president steps down.
"I have questions, as any person
would, because Chávez has exerted a tremendous influence on low-income
Venezuelans and the Armed Forces, and finding a person able to do so is yet to
come. Questions arise," the Uruguayan leader said. (El Universal,
12-26-2012; http://www.eluniversal.com/nacional-y-politica/121226/uruguayan-president-sees-a-big-question-mark-in-venezuela-without-chav)
The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.