Venezuela's central government debt at $ 71.7 bn in 2010

Mar 01, 2011 12:00 AM

Minister of Planning and Finance Jorge Giordani said at the National Assembly (AN) that the Venezuelan government implemented a responsible policy of borrowing. However, official numbers show that domestic and external debt amounted to $ 71.7 bn last year.
According to data issued by the Ministry of Finance, the balance of debt rose by 20 % in the 12 months of 2010, because central government debt totalled $ 59.8 bn in December 2009.

Two years ago, the Executive Office opted to offset falling oil prices with more debt. Although oil prices rebounded in 2010 and surpassed $ 72, the government maintained its strategy and continued borrowing in order to have funds to pay running costs, among other commitments.
According to the Ministry of Finance, the domestic debt had the highest growth and gained 40 % in a year from $ 24.7 bn in 2009 to $ 34.7 bn in the fiscal year 2010. Most of the operations were aimed at supporting fiscal management (budgetary expenses).

The exchange rate adjustment made by financial authorities in January 2010 prevented a higher increase in domestic obligations. However, the Ministry of Finance used the exchange rate of VEB 2.60 per dollar as baseline to estimate public debt even though foreign currency was sold at three different foreign exchange rates.
The Ministry of Finance reported that the external debt amounted to $ 37 bn, a 5.4 % hike compared to fiscal year 2009, when it stood at $ 35.1 bn.

Venezuelan financial authorities said that Venezuela's public debt is manageable. However, analysts are concerned by the upward trend and the cost of future commitments.
In its latest report the economic research firm Econométrica concluded that the Venezuelan debt will spike to $ 146.5 bn by the end of 2011. Such an amount includes the debt of the Ministry of Finance; liabilities of the state-run oil company Petróleos de Venezuela (PdVSA); the loan granted by China and $ 21.8 bn to be paid due to international arbitration complaints.

According to Econométrica, Venezuela's debt amounted to $ 126 bn by the end of 2010.
The economic firm also said that Venezuelan debt burden will be at least 58 % of the GDP by the end of 2011.

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