Venezuela speeds up economic growth, GDP rose 4.5% in first trimester of 2011

Caracas, 17 May. AVN .- A significant increase of 4.5% in the Gross Domestic Product (GDP) at constant prices was registered in Venezuelan economy during the first trimester of this year compared to the same period of 2010, as a result of recovery in most of the economic activities.

The President of the Venezuelan Central Bank (BCV in Spanish) Nelson Merentes presented the results of the first trimester of the year this Tuesday in a press conference accompanied by the minister of Planning and Finances Jorge Giordani and the president of the National Statistics Institute (INE) Elias Eljuri.

Merentes underscored that the growth is the result of a rise of 3.3% in the public sector and almost 5% in the private sector.

“This favorable result reaffirms the reactivation of the domestic productive apparatus that began in the fourth trimester of 2010 within a complex international environment that was characterized by an intensification of the global crisis,” reads the report issued by the BCV.

In 2010, Venezuela registered a deceleration in the second and third trimesters. Then in the fourth trimester the GDP grew 0.6%. In total, economy contracted 1.4% in 2010.

The economic boost in 2011 is the result of a growth in the domestic aggregated demand, in both consumption and investment, favored by a higher flow of currencies to economic agents devoted to production and consumption.

The private sector received a new boost. Its aggregated net value grew 4.6%, a favorable result evidenced in most of the branches composing it. On the other hand, the public sector rose 3.3% based on more services rendered by the Government and to communication and financial services.

Growth of non-oil sector

The aggregated value of non-oil activities rose 5.2% in the first trimester compared to the period of the previous year, while the oil sector fell 1.8%.

Among the positive behavior of non-oil activities, it is worth mentioning the growth in the aggregated value of commerce (10.4%), transport and storage services (7.8%), communications (8%), manufacture (7.6%), services produced by the Government (7.6%), financial institutions (5.6%) and elctricity and water (3.1%). Nevertheless, in the construction sector the aggregated value fell 7.7%.

Regarding the manufacture industry, the growth of 7.6% is linked to the significant increase of 8.6% registered in the production of private manufacture. The result was mainly based on the food and beverages industry, which grew 5.6% due to a sustained increase in the demand.

Likewise, positive behaviors were registered in machinery and electrical devices (27.9%), paper industry (18.6%), edition and printing (14.1%), manufacture of chemical and substances and products (13.6%), furniture (12.9%), clothing (12.9%), common metals (11.9%), non.metal materials (9.6%) and rubber and plastic (7.8%).

On the contrary, there was a contraction in the fabrication of machinery and equipments (-10.9%), wood products (-8.7%), vehicles (-3.1%) and textiles (-1.2%).

The food industry registered significant growth on bakery (9.7%), wheat threshing and milling (10.8%), oils and vegetable and animal fats (29.6%) and other food products (19.5%).

Likewise, it is worth mentioning the recovery of manufacture companies in the public sector (8.2%) compared to the same period of the previous year, thanks to the increase in the production of common metals (24%), mainly promoted by the state-run iron and steel company Sidor (106.3%) and Interlumina (11.7%). Their products are used mainly to attend the demand of public sector construction projects.

Construction and communications

The construction demanded by the public sector rose 5.2%, linked to an increased execution of works from oil and non oil companies (6.5% and 22.1%, respectively).

On the contrary, the construction demanded by the private sector fell 17.8% affected by a reduction in the execution of works caused, among other factors, by a reduced availability of raw materials, the report shows.

Moreover, the communications sector continues with the expansive trend registered for 29 consecutive trimesters which is the result of a permanent technological adequacy to attend an increasing demand of the Internet, mobile and home phones, data transmission and cable television. Said activities generated an increase on the aggregated value of 10.1% and 6.6%, in public and private sectors, respectively.

Furthermore, General Government services grew 7.6% boosted by an increased provision of public management and defense services (10.7%), health (7.7%) and teaching (4.6%), in the framework of the promotion of social investment destined to low-incomes population.

This result was favored by a higher enrollment in university education, more equipments for educative institutions, granting of consumables and materials for the health network and a governmental strategy aimed at facing the problems that have been caused by the heavy rains that have fallen in the country since the end of last year. All these events and actions created more occupation in the sector.

Additionally, the aggregated offer rose 9.1% due to the combined effect of the increase of 22.6% on imports and the growth of the GDP.

The domestic aggregated demand increased 9.6% and foreign by 5.1%. The result of the domestic aggregated demand is linked to the growth in the expenditure of Government”s final consumption (10.4%), expenditure of private”s final consumption (3.7%) and the fix net investment (4.9%).


2 responses to “Venezuela speeds up economic growth, GDP rose 4.5% in first trimester of 2011

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