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Venezuela Economy 1999

    Economy—overview: The petroleum sector dominates the economy, accounting for roughly a third of GDP, around 80% of export earnings, and more than half of government operating revenues. As a result, the steep downturn in international oil prices has had a severe impact on the economy; fiscal cuts spurred by the loss of revenues, high interest rates, and the sharp downturn in export earnings drove the economy into recession in 1998. The recession continued into 1999 with oil prices forecast to stay relatively low, but rising. Although the government has pursued moderate austerity measures to address the downturn in revenues, Venezuela's ongoing reform program has largely stalled. Pressure on the bolivar—overvalued by as much as 40%—was also significant through much of 1998, increasing the probability of an adjustment of the currency in 1999. Newly elected President Hugo CHAVEZ will be hard pressed to address Venezuela's many economic ills. He has promised to strike a balance between reforms designed to address the structural deformities of the economy and addressing declining living standards. CHAVEZ has sought to play down the populism that marked his political campaign for the presidency in an effort to allay investor concerns. The wide range of viewpoints represented on CHAVEZ's economic team is likely to make rapid implementation of a coherent policy difficult.

    GDP: purchasing power parity—$194.5 billion (1998 est.)

    GDP—real growth rate: -0.9% (1998 est.)

    GDP—per capita: purchasing power parity—$8,500 (1998 est.)

    GDP—composition by sector:
    agriculture: 4%
    industry: 63%
    services: 33% (1997 est.)

    Population below poverty line: 31.3% (1989 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.5%
    highest 10%: 35.6% (1995)

    Inflation rate (consumer prices): 29.9% (1998)

    Labor force: 9.2 million

    Labor force—by occupation: services 64%, industry 23%, agriculture 13% (1997 est.)

    Unemployment rate: 11.5% (1997 est.)

    revenues: $11.99 billion
    expenditures: $11.48 billion, including capital expenditures of $3 billion (1996 est.)

    Industries: petroleum, iron ore mining, construction materials, food processing, textiles, steel, aluminum, motor vehicle assembly

    Industrial production growth rate: 0.5% (1995 est.)

    Electricity—production: 73 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 20.55%
    hydro: 79.45%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 72.85 billion kWh (1996)

    Electricity—exports: 150 million kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: corn, sorghum, sugarcane, rice, bananas, vegetables, coffee; beef, pork, milk, eggs; fish

    Exports: $16.9 billion (f.o.b., 1998)

    Exports—commodities: petroleum, bauxite and aluminum, steel, chemicals, agricultural products, basic manufactures (1998)

    Exports—partners: US and Puerto Rico 57%, Colombia, Brazil (1997)

    Imports: $12.4 billion (f.o.b., 1998)

    Imports—commodities: raw materials, machinery and equipment, transport equipment, construction materials (1998)

    Imports—partners: US 53%, Japan, Colombia, Italy, Germany (1997)

    Debt—external: $26.5 billion (1996)

    Economic aid—recipient: $50.8 million (1995)

    Currency: 1 bolivar (Bs) = 100 centimos

    Exchange rates: bolivares (Bs) per US$1—570.267 (January 1999), 547.556 (1998), 488.635 (1997), 417.333 (1996), 176.843 (1995), 148.503 (1994)

    Fiscal year: calendar year

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    Revised 1-Mar-99
    Copyright © 1999 Photius Coutsoukis (all rights reserved)