Mérida, November 18th 2011 (Venezuelanalysis.com) – Venezuela’s economy this year is set to grow at double the rate of the Venezuelan Central Bank’s (BCV) forecast of a 2% expansion in Gross Domestic Product (GDP) in 2011, with the BCV yesterday reporting third quarter GDP growth of 4.2%, relative to the same quarter of the previous year.
The overall GDP growth for the first nine months of 2011 stands at 3.8%, with first and second quarter growth of 4.8% and 2.5% respectively.
“Venezuela has entered a new period of growth. There’s a rate of approximately 4% in the first three quarters of 2011, which doubles the GDP estimate for this year,” Venezuelan Minister of Planning and Finance Jorge Giordani stated.
The minister further emphasised that the aim of 5% GDP growth contained within the projected 2012 Venezuelan national budget was both “real” and “feasible”, with the Venezuelan economy likely to finish 2011 with over 4% GDP expansion.
BCV President Nelson Merentes reiterated the trend of Venezuela’s continued economic growth in the coming year, explaining, “When these results are analysed we see that we are around 4% [of growth in 2011]…the early, scientific forecasts indicate furthermore that for the last quarter [of 2011], and the first [of 2012], we are going to continue this tendency”.
Construction was the most important economic sector contributing to the third quarter figures, growing by 10% after shrinking the previous six quarters.
Giordani explained that because construction contributes to 8% of Venezuela’s GDP, the 10% increase in the sector contributed to 0.8% of the 4.2% of third quarter growth.
The BCV’s third quarter figures also demonstrate economic growth across the board, including in communications (7.9%), mining (7.6%), transport (6.6%), community social services (4.6%), and manufacturing (2.1%), with Merentes commenting “we are in a cycle of general growth, we have all sectors growing in an important manner”.
The president of the Finance and Economic Development Commission of Venezuela’s National Assembly (AN), Ricardo Sanguino, attributed the growth in the construction sector to the boost given by the government’s new mass housing program, the Great Housing Mission (GMV), launched in April this year.
Aiming to build over 2 million homes in 7 years, the GMV has promoted an expansion of the public sector in Venezuelan housing construction, with the public sector completing 62% of total houses constructed so far in 2011, compared with only 30% in 2009.
Sanguino pointed out that while the economies of the “developed” countries are still suffering from the global economic crisis and growing unemployment, the trend in Venezuela is the opposite, with Venezuelan growth “the product of a fundamentally social policy of boosting internal production”.
After enjoying an average economic growth of 10.2% between 2004 and 2008, between the impact of the global economic recession, a sharp fall in the price of oil, and an electricity crisis brought on by a prolonged drought, Venezuela’s oil-reliant economy experienced a six quarter recession in 2009 – 2010.
Venezuela emerged from recession in the fourth quarter of 2010 with 0.6% GDP expansion, and has now enjoyed four consecutive quarters of economic growth.