Economics &
Finance
Moody's downgraded Venezuela’s Ratings Outlook to
negative, from stable and affirmed the B1
local currency and B2 foreign currency government bond ratings, citing
increased political uncertainty and associated risks to the Venezuelan economy
and government finances, informed Reuters. (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33350&idc=2; El
Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/moodys-changes-forecast-on-venezuelas-pdvsa-bonds)
UN forecasts economic Venezuela's
growth at 2.5% in 2013
A "modest
acceleration of economic growth" is expected in the next two years in
Latin America and the Caribbean with growth rates at 3.9% in 2013 and 4.4% in
2014, according to a United Nations report entitled, "World Economic Situation and Prospects 2013." Countries in the
region reporting below average growth (3.9%) are: El Salvador, 2.2%; Venezuela,
2.5%; Argentina, 3.2%%; Cuba, 3.5%; Honduras, 3.5; %; Guatemala, 3.7% and
Mexico, 3.8. (El
Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/un-forecasts-economic-growth-in-venezuela-at-25-in-2013)
Venezuela registers highest inflation in the region
According to official figures from Argentina's National
Statistics and Census Institute (INDEC), inflation there 2012 was the second in
South America (10.8%), after Venezuela with 20.1%, and followed by Uruguay
(8.6%), Brazil (5.8%) and Bolivia (4.5%). (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33348&idc=2)
Public spending rose 6.7% in 2012
According to Finance Ministry data, public expenditure
was U$D 96.27 billion in 2012, up 6.7% in real terms (after inflation) from
2011, when public spending was U$D 75.81 billion. Increased spending was mainly
in construction, government services, and trade, underlining the economy's
growing dependence on public expenditure showing. (El Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/venezuelas-public-expenditure-climbs-67-in-2012)
Chinese loans to Venezuela were U$D
46 billion in four years
According to a comparative analysis by the Economics
Faculty of Mexico's National Autonomous University, twelve Latin American
countries received U$D 85.8 billion in credits from China from 2005-2012. The
amount exceeds the credits granted by the World Bank (U$D 53.3 billion) and the
Inter-American Development Bank (U$D 66.9 billion) during the same period. The
study shows that Venezuela has received U$D 46.5 billion, which is 55% of the
total loans granted to the region. These funds were mainly directed to
government projects, and programs in state-owned oil company PDVSA. (El Universal, 01-16-2013; http://www.eluniversal.com/economia/130116/chinese-loans-to-venezuela-amount-to-usd-46-billion-in-four-years)
Commodities
OPEC is keeping its global crude demand outlook unchanged
for 2013 up barely 0.85% from last
year in line with a global economy that, despite starting with a slight
recovery, will continue to be threatened by uncertainty. The Vienna based group
foresees world economy growing 3.2% in 2013, slightly up from last year’s 3%.
(Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33357&idc=4)
Central Bank reports severe
shortages at the close of 2012
The Bank reports high shortage indexes in 6 key products:
precooked corn (43.3% - which means the same percentage of establishments
visited did not have the product); wheat flour (76.8% in December, up from
10.8% in January); sunflower oil (86.1%); corn oil (56.8%); vegetable based oil
(67.1%); and sugar (78.1%). More in Spanish: (El Universal, 01-18-2013; http://www.eluniversal.com/economia/130118/bcv-reporto-que-seis-rubros-cerraron-2012-con-escasez-grave)
Official claims production levels and product
distribution are normal
Karlin Granadillo, National Superintendent of Fair Costs
and Prices, says production and shipment of products remains at normal levels
and dismissed the idea of shortages. She says there is normal decrease in
production during January, due to collective vacations in December; and claimed
that toilet paper-producing companies are 100% operational and toothpaste
companies are at about 80% of their output level. (AVN, 01-17-2013; http://www.avn.info.ve/contenido/production-levels-and-shipment-products-are-normal)
Venezuela
won Las Cristinas arbitral case
Attorney General Cilia Flores announced that a case brought against
Venezuela by Canada's Vannessa Ventures Ltd. over a exploration and mining
contract for the Las Cristinas Mine in Bolivar state was decided in favor of
Venezuela. In an official publication she states "the decision to rescind the contract....was not expropriation"
and therefore did not violate the Bilateral Investment Protection Treaty
between Canada and Venezuela. More in Spanish: (AVN, 01-18-2013; http://www.avn.info.ve/contenido/venezuela-gan%C3%B3-juicio-internacional-sobre-mina-cristinas-del-estado-bol%C3%ADvar;
El Universal, http://www.eluniversal.com/economia/130118/ciadi-fallo-a-favor-de-venezuela-en-juicio-por-las-cristinas)
International Trade
Government will import U$D 180
million in food from Argentina
Argentina's Federal Planning Minister Julio De Vido and Venezuela's
Nutrition Minister Carlos Osorio have met in Caracas and reached an agreement
for Venezuela to import "rice, milk,
chicken and cattle beef, and all products needed to guarantee nutrition".
More in Spanish: (El Nacional, 01-18-2013; http://www.el-nacional.com/)
Politics
Maduro says Chavez is serene and
conscious
After a three day visit, Vice President Nicolás Maduro is
reporting that "in general terms I
see him very quiet, very serene, and very conscious of all phases he has gone
through after his operation". More in Spanish: (AVN, 01-18-2013; http://www.avn.info.ve/contenido/maduro-ch%C3%A1vez-est%C3%A1-sereno-y-consciente-del-proceso-post-operatorio; El Universal, http://www.eluniversal.com/nacional-y-politica/130118/maduro-dice-que-evaluan-escenarios-pero-chavez-sigue-al-mando)
VP did not deliver annual report
speech to Congress to avoid violating the Constitution
Vice President Nicolás Maduro says the Government,
including himself, is fully aware that it was not up to him as vice-president
to address the National Assembly (AN) to present the Government's Annual
Report, as it would have been a violation of the Constitution. He said:
"The President instructed me to show up at Congress to submit the Yearly
Report in writing as I am not entitled as vice-president to do it in his stead.
We were always aware of this." (El Universal, 01-16-2013; http://www.eluniversal.com/nacional-y-politica/130116/vp-refrains-from-addressing-congress-to-avoid-violating-the-constituti)
Venezuela's military presented their proposal for the 2013-19
plan, to Vice
President Maduro and Defense Minister General Diego Molano said they would obey
and enforce the Supreme Court's decision “allowing the
President to return to the country when his health improves.” He also
ratified their loyalty, endorsement and solidarity to Hugo Chávez. (Veneconomy,
01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33361&idc=1)
Government publishes decree with
Chavez signature
Venezuela's government has published a decree signed by
President Hugo Chavez, while his vice president said Wednesday that the ailing
leader also sent a message of gratitude to the military for its loyalty. It was
the first time the president's signature has appeared in the Official Gazette
since his latest cancer surgery in Cuba more than five weeks ago. The decree
issued Tuesday and published in the government newspaper on Wednesday names
former vice president Elias Jaua as Venezuela's new foreign minister. The
signature is printed along with the presidential stamp. (Fox News, 01-16-2013; http://www.foxnews.com/world/2013/01/16/venezuela-publishes-decree-with-chavez-signature/)
Foreign Minister´s appointment
termed a forgery
Perkins Rocha, an expert in public law and former Justice
in the Administrative Court, has filed a Supreme Court case claiming a decree
purportedly signed by President Chavez appointing Elías Jaua as Foreign
Minister is false and says all action by Jaua should be considered null and
void.
The decree's text indicates it was signed in Caracas
while Chavez remains in Havana, and Rocha points out that the law states all
such appointments must be made in Venezuela. More in Spanish: (Tal Cual,
01-18-2013; http://www.talcualdigital.com/index.html)
15 daily public protests registered
during 2012 in Venezuela
The Social Conflict Observatory's annual report shows
there were 5483 public demonstrations against the government during 2012, a 3%
increase over 2011. This new record surpasses the total number of protests
registered in 1999-2002, the first four years of Mr. Chavez's rule. Protests
included marches, demonstrations and the closing of public roads. More in
Spanish: (El Universal, 01-18-2013; http://www.eluniversal.com/nacional-y-politica/130118/en-2012-se-registraron-en-venezuela-15-protestas-diarias)
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.
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