Venezuelan Economy Shows Continued Growth

The Venezuelan economy has had a continuous annual growth rate of 12.6 percent for the last three and a half years Venezuela's Development Minister Jorge Giordani reported today.

Mérida, May 15, 2007 (— The Venezuelan economy has had a continuous annual growth rate of 12.6 percent for the last three and a half years Venezuela’s Development Minister Jorge Giordani reported today. According to preliminary indicators released by the Central Bank of Venezuela, the Venezuelan economy has sustained this high average of growth for 14 consecutive trimesters. The GDP grew a total of 8.8 percent in the first quarter of 2007, and the unemployment level reached its lowest level since 1999.

Jorge Giordani made the announcement today at a press conference in the presidential palace. Using statistics from the Central Bank of Venezuela for the first quarter of 2007, the minister explained that all productive sectors of the economy have shown growth so far this year.

"This shows that the Venezuelan economy has entered a new period of general high-sustained growth," reported Giordani. "The last time (the economy) grew at a similar rate was during the mid-1950’s," he said.

The private sector accounted for most of the growth with a 10.3 percent expansion. The public sector, on the other hand, only grew 1.7 percent according to the Central Bank. A boom in non-petroleum-related activity contributed significantly to the growth expanding 10.6 percent.

According to the report the growth was generalized among all sectors. Manufacturing grew 15.8 percent so far this year, the machine industry 13.8 percent, plastic and tires saw growth of 24 percent, transportation 16.4 percent, communications 18.3 percent, and the food and drink industry grew 13 percent.

"Recent growth in demand for food indicates that people are eating more and better," said Giordiani.

As a result of the growth in these sectors, demand increased in other sectors such as the construction industry, which grew 26.5 percent, and financial brokering 26.2 percent. Growth in the construction industry is largely due to the increase in housing projects both in the private sector and public sector, which have both grown in recent years.

The Central Bank attributes the growth of the economy to a number of factors. Among those factors are the increase in household income, the recovery of purchasing power, the expansion of government social programs, and increased employment. The minister also mentioned the recent increases in minimum wage.

"Venezuela is practically at the top of Latin American countries," he said.

Other factors stimulating growth include increased investment and consumption due to the greater access to credit. The government has also increased spending and investment in public infrastructure.

Government services in general continue to show growth. Health services increased by 2 percent for the period, education by 5.9 percent, and public administration and defense by 1.6 percent. Higher government revenues as a result of increased tax collection and petroleum income has allowed the government to finance a number of social programs to meet the needs of the population.

Also released today, a report by the National Institute of Statistics (INE) showed that unemployment has dropped by 1.4 percent over the last year to a level of 8.8 percent, the lowest since 1999. According to the report, between April 2006 and April 2007 the number of unemployed people dropped from 10.2% to 8.8% for a total of 469,675 more employed people than a year ago.

The President of the INE, Elias Eljuri, pointed out that the number was the lowest rate of unemployment since 1999. According to the numbers of the INE, taken every April for the last nine years, unemployment rates have been as follows:

1999: 14.6 percent
2000: 14.7 percent
2001: 14.5 percent
2002: 15.9 percent
2003: 19.1 percent
2004: 16.3 percent
2005: 12.1 percent
2006: 10.2 percent

Between April 2006 and April 2007 the amount of the population employed in the formal sector increased by 239,428 to a total of 6,307,881 and making up 55.4 percent of the work force.