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Venezuela Economy 1999
Economyoverview: The petroleum sector dominates the economy, accounting for roughly a third of GDP, around 80% of export earnings, and more than half of government operating revenues. As a result, the steep downturn in international oil prices has had a severe impact on the economy; fiscal cuts spurred by the loss of revenues, high interest rates, and the sharp downturn in export earnings drove the economy into recession in 1998. The recession continued into 1999 with oil prices forecast to stay relatively low, but rising. Although the government has pursued moderate austerity measures to address the downturn in revenues, Venezuela's ongoing reform program has largely stalled. Pressure on the bolivarovervalued by as much as 40%was also significant through much of 1998, increasing the probability of an adjustment of the currency in 1999. Newly elected President Hugo CHAVEZ will be hard pressed to address Venezuela's many economic ills. He has promised to strike a balance between reforms designed to address the structural deformities of the economy and addressing declining living standards. CHAVEZ has sought to play down the populism that marked his political campaign for the presidency in an effort to allay investor concerns. The wide range of viewpoints represented on CHAVEZ's economic team is likely to make rapid implementation of a coherent policy difficult. GDP: purchasing power parity$194.5 billion (1998 est.) GDPreal growth rate: -0.9% (1998 est.) GDPper capita: purchasing power parity$8,500 (1998 est.)
GDPcomposition by sector:
Population below poverty line: 31.3% (1989 est.)
Household income or consumption by percentage share:
Inflation rate (consumer prices): 29.9% (1998) Labor force: 9.2 million Labor forceby occupation: services 64%, industry 23%, agriculture 13% (1997 est.) Unemployment rate: 11.5% (1997 est.)
Budget:
Industries: petroleum, iron ore mining, construction materials, food processing, textiles, steel, aluminum, motor vehicle assembly Industrial production growth rate: 0.5% (1995 est.) Electricityproduction: 73 billion kWh (1996)
Electricityproduction by source:
Electricityconsumption: 72.85 billion kWh (1996) Electricityexports: 150 million kWh (1996) Electricityimports: 0 kWh (1996) Agricultureproducts: corn, sorghum, sugarcane, rice, bananas, vegetables, coffee; beef, pork, milk, eggs; fish Exports: $16.9 billion (f.o.b., 1998) Exportscommodities: petroleum, bauxite and aluminum, steel, chemicals, agricultural products, basic manufactures (1998) Exportspartners: US and Puerto Rico 57%, Colombia, Brazil (1997) Imports: $12.4 billion (f.o.b., 1998) Importscommodities: raw materials, machinery and equipment, transport equipment, construction materials (1998) Importspartners: US 53%, Japan, Colombia, Italy, Germany (1997) Debtexternal: $26.5 billion (1996) Economic aidrecipient: $50.8 million (1995) Currency: 1 bolivar (Bs) = 100 centimos Exchange rates: bolivares (Bs) per US$1570.267 (January 1999), 547.556 (1998), 488.635 (1997), 417.333 (1996), 176.843 (1995), 148.503 (1994) Fiscal year: calendar year
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