Today 11:13 PM ET (Dow Jones)
By Ezequiel Minaya CARACAS--Venezuela released two clues on Thursday of its increasingly troubled economy.
The central bank said on its website after markets closed that gross domestic product growth sharply slowed in 2013 to 1.3% compared with 5.6% in the previous year. The growth figures are normally released within weeks of the year's end, but had been delayed for months without explanation. The central bank also noted that the economy expanded 1% from October to December.
In a client note on Thursday, Goldman Sachs analyst Mauro Roca predicted Venezuela's economy would get worse in 2014, contracting 1.3%. "In our view, economic activity will continue to suffer from increasing government interventionism and production bottlenecks originated in the relative scarcity of hard currency," Mr. Roca said in the report.
The bank also said that consumer prices soared 4.1% in March compared with the previous month. Bank authorities blamed the high inflation rate on disruptions to the economy from antigovernment protests.
The announcement came more than a week later than is required by law and was missing information that is normally included, such as the 12-month inflation rate.
"The blocking of streets, threats against transportation workers, the related absenteeism, the attacks on industrial areas, damage to public and private infrastructure, the looting and burning of commercial centers" contributed to the higher inflation, the statement said. It said inflation would continue to rise through April.
The report appeared to be at odds with recent statements from officials, including President Nicolás Maduro, that the protests have had little economic impact and have been contained to a handful of opposition strongholds.
The central bank's last report showed an annual inflation rate of 57.3% in February, one of the highest in the world, as the oil-rich nation grapples with a scarcity of foreign currency that has led to shortages of basic goods and helped fuel protests. There have been 41 deaths linked to the demonstrations.
"The result was expected and confirms that inflation for this year will end up at a minimum of 60%," said Tamara Herrera, the chief economist at Caracas-based financial research firm Sintesis Financiera. She estimated that year-to-year inflation reached 59.4% in March.
"The protests have very little to do with the determination of prices," she said. "Instead it is much more related to bottlenecks in distributing hard currency, the fall of production and restrictive government controls."
The central-bank statement also didn't show the latest results for the scarcity index, a measure of basic items that are lacking in the market. That index has climbed to a record level in recent months.
Seeking a way to pump more greenbacks into the economy, Mr. Maduro in March loosened currency controls to allow limited trading of dollars between private parties.
A U.S. dollar fetched 49.68 bolívares in the market on Thursday, compared with the fixed exchange rate of 6.3 bolívares per dollar that is still used for a vast majority of government-sanctioned transactions.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
April 24, 2014 23:13 ET (03:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
No comments:
Post a Comment