Caracas , November 27, 2006 (venezuelanalysis.com)— The Venezuelan National Assembly last week unanimously approved a budget of $53.6 billion (115 trillion bolivars) for the coming year, which is 32% higher than the 2006 budget.
44% of that will go on social spending. That is significantly more than the 17% previous governments used to spend and shows why the government is popular among the poorer sections of society. The Venezuelan poverty rate has fallen from 45% to 34% last year.
“This budget guarantees a priority of our revolution: spending on the process of social justice,” Rodrigo Cabezas, head of the National Assembly’s finance committee said afterwards.
The spending plans are based on a forecast of a 10% inflation rate and 6% economic growth and an exchange rate of Bs. 2,150 to the dollar, which is the same rate it has been for the previous two years. “The economy is growing at a spectacular rate. We’re making up for 25 years of growth averaging 2 percent,” said Cabezas.
There will be 7 trillion bolivars available for social security payments to 1 million retirees, and, for the first time, 3 trillion bolivars for community-based citizens’ councils, set up to locally administer work projects approved by congress.
The government currently receives almost half its income from the oil industry and the budget is based on a price of $29 a barrel of oil. The average price a barrel in 2006 has been $58, so the cash available to spend will probably easily exceed the budget plan.
The budget plan now goes to Miraflores Palace for the signature of President Hugo Chávez.
In other economic news the Venezuelan finance ministry released an updated report on the country’s international reserves, which have now reached $36.48 billion.