Venezuelan economy grows 1.6% in the first half

Aug 23, 2013 12:00 AM

The Venezuelan economy lost the momentum it recorded last year, and grew only 1.6% of Gross Domestic Product (GDP) in the first half of 2013.

Economic growth was hit by restrictions in the sales of foreign currency during most of the first half and lower public expenditure.

During the first half of 2012, the economy grew 5.8% thanks to public investment, which was boosted by oil prices averaging USD 107.

In 2013, the outlook changed, and even though oil prices exceeded USD 102, public spending fell and therefore, the sectors depending on public funding recoiled.

The results show that the Venezuelan economy is still facing unbalances. Economist José Guerra remarked that economic slowdown occurs against a backdrop of climbing inflation. In the first half of 2012, prices increased by 7.5%, while in the same period this year, prices hiked by 25%.

The Central Bank of Venezuela (BCV) reported that in the first quarter of 2013, the economy grew by 0.5%. This change was due to a lower added demand, falling imports, and changes in the foreign exchange system.

In the second quarter, the economy picked up and grew by 2.6%. Authorities believe this rebound was due to a greater availability of raw material, an increase in imports by some sectors and a higher demand of goods and services.

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