Mérida, September 23rd, 2009 (Venezuelanalysis.com) - After
discussing next year's budget with ministers on Friday, Venezuelan president
Hugo Chavez said they would be "prudent", and base it on a low oil price, large
social spending and an estimated economic growth of 0.5%. He also said that
there would be no problems fulfilling this year's budget, with all wages,
bonuses, and allocated social spending guaranteed.
In March this year the government revised its 2009 budget to
adjust it to the drop in oil prices as a result of the world economic crisis,
maintaining social spending but demanding that high level functionaries cut
their wages, bonuses, and unnecessary spending. The original budget had been
based on $60 per barrel oil price, and was adjusted to $40 per barrel.
Chavez announced that next year's budget, soon to be presented to
the National Assembly for approval, will assume an average oil price of
"We're obliged to be prudent, despite the fact that the price of
oil has stabilised and currently is between a low of $60 and a high of $70," he
"We've estimated that the GDP for 2010 will grow by 0.5%, even
though the International Monetary Fund [IMF] has said that we'll have negative
growth." Chavez also said they were estimating that inflation would be between
20-22% next year.
He said one of the main aims of the government was to maintain
levels of employment and the social investment in education, health and food. This
will include BsF 5 billion (US$ 2.3 billion) allocated to the government's
social missions next year.
He also explained that the budget will use money obtained from selling
government debt bonds, of which the government offered $3 billion worth earlier
this year, but is considering raising that to $4 billion, given the high demand
there has been for them.
"With this measure we are democratising government finances,"
Chavez said, and minister for finances, Ali Rodriguez, said the high demand for
the bonds showed the trust investors had in "the capacity of the government to fulfil
"Nevertheless international companies continue classifying us
negatively with their risk estimates, which shows the political component that
has overwhelmed them...and what this shows us is that they [the companies] aren't
very trustworthy," Rodriguez said.
Speaking at a mass meeting of Venezuelan United Socialist Party
(PSUV) members yesterday in Caracas, Chavez announced that Venezuela will end
2009 without budget problems.
He said the resources for paying wages and end of year bonuses, as
well as for agricultural, social, and infrastructural investment were all
Chavez also said that yesterday in his meeting with the council of
ministers, they analysed the budget and revised, "earnings, expenses, what
we've spent up until now, what we haven't spent, pending additional loans,
petroleum income, the cutbacks and savings that we've had to keep doing."
The world is suffering, "an economic crisis like there has never
been before... We've had to cut back petroleum production, endure the fall in the
price of petroleum," Chavez said but emphasised that Venezuela isn't "drowning"
because of it, despite the "fatalistic predictions" of the opposition.