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| Outlook Report |
Many a slip between 2009 and 2012
So far this year, the dynamics of the economy has worsened owing to the devaluation of the bolivar and the deepening of the electricity crisis. On the political front, the dynamics look no better, in particular for the Executive and President Chávez. This means that Chavismo has to guarantee not only its triumph at the upcoming parliamentary elections in September but also the viability of the political project with a view to the presidential reelection in 2012.
As far as the economy is concerned, this requires a change in direction and in the model that is currently being implemented in Venezuela. The economic crisis is a reflection of the situation in the country and of a lowering of the population’s expectations. This is reflected in an unfavorable performance in the majority of economic sectors, in particular manufacturing, commerce, and transportation, which account for 30% of GDP.
Our center Scenario is moderate electricity crisis: This scenario contemplates moderate growth in public spending (5.6% compared to the previous year), a drop in private consumption of 4.2%, and growth in total investment of only 0.9% (driven mainly by the public sector). In this scenario, we would have a drop in economic activity of 1.3%, growth of 1.2% in the oil sector, and a drop of 1.7% in the non-oil sector. |
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