Caracas, Venezuela, May 17, 2006—First quarter GDP in Venezuela was 9.4% higher than the same time last year, according to numbers released yesterday by Venezuela’s Central Bank.
The growth was driven by a 10.9% increase in the non petroleum sector. According to the figures, growth was 4% in the public sector and 11% in the private sector, and oil income decreased by 0.2%.
In a release the bank said that there was across the board growth in non-oil activity, led by 9.4% growth in the manufacturing industry, 21% growth in construction, and 28.1% growth in communications. It credits the growth of these sectors to increased consumer demand and investment, which was 23.9% of GDP, partially caused by falling interest rates.
In 2002 and 2003, an attempted coup and an oil industry shut down caused the economy to shrink 8.9% and 7.7%, respectively. Since then Venezuela has seen a strong recovery, aided, in part, by strong oil prices and generous government spending. Currently, first quarter oil related GDP is seven percent less than it was in 2001, the year before the political crisis, non oil GDP is up 19%, and overall GDP is up 13%.
Particularly notable is the recovery of the mining sector, which, after shrinking by 35% in the first quarter of 2002 and 2003, has grown by 19% since 2001; general government services, which had been steadily decreasing since at l997, rose steadily even during the political crises to be 34% higher than in Q1 2001; and repair commerce and services, which rose by 33% since Q1 2001.
Venezuela’s strong growth in recent years stands in stark contrast to most of Latin America, which grew only 3% from 2000 to 2005, and only 11% in the 20 years before, as compared to 80% in the preceding 20 years, according to a paper by the DC based Center for Economic and Policy Research.