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Chávez’s three crises
So far this year, the dynamics of the economy has worsened, exacerbated by 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. |
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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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Merentes Vs. Giordani?
In Venezuela, the last few weeks have been marked by heightened expectation from the economic agents expecting a mega-issuance of bonds by the Central Bank of Venezuela (BCV) aimed at taking pressure off the exchange market. At Ecoanalítica, we don’t believe that this is what the Administration has in mind. |
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After January, What outlook does the Venezuelan economy have?
The month of January has finally ended and it seems like if a year has gone by in Venezuela. The devaluation of the official exchange rate and the electric power crisis becoming much worse are both factors that will impact the performance of the Venezuelan economy in 2010. In this Weekly Report, we offer our first preliminary outlook of how the Venezuelan economy will perform this year. |
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PDVSA: Wanting to, but not being able to
Since October 2008, the Ministry of the People’s Power for Energy and Petroleum (Menpet) has been carrying out the selection process for new partners to develop the Carabobo block of the Orinoco Oil Belt. This will be the first time in 11 years that PDVSA will begin to develop a new oil producing region, an event that will make Venezuela one of the most important oil producing nations in the world and that will play an important part in doubling the company’s declining oil production in the middle term.
Last week, insuring that the international companies participating in this venture would have legal security with regard to their investments made in Venezuela, President Chávez, along with the Minister of Energy and Petroleum and president of PDVSA, Rafael Ramírez, announced the consortiums, winners of the bidding process, which will begin developing the Carabobo block. This Report will focus on highlighting the impact this project will have on PDVSA, and the fact that looking at the company books, it seems impossible that it will be able to carry it out. Therefore, we feel that it is very likely that the Venezuelan oil company will turn to the market in search of new financing.
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