This bounce-back is more statistical than real because the final quarter of 2002 was a virtual write-off. In that quarter, the economy contracted by 17% compared with the final quarter of 2001. The final quarter of 2002 was when the strike-cum-lockout, aimed at forcing President Hugo Chávez from office, started.
Nevertheless, the central bank pointed out that the public sector grew by 15% in the final quarter of 2003, while even the hard-pressed private sector managed a 6% year-on-year increase. Overall, the central bank reported, domestic demand was up by 8%, while exports were up by 17%. The surge in exports was largely due to the recovery in oil output and the strength of oil prices.
The bank pointed out that in the final quarter of the year the oil sector did 25% more business than it did in the same period of 2002, while the non-oil sector was up by 3.9%. The bank pointed out that the (small) private-sector part of the oil industry expanded at a 47% year-on-year rate in the final quarter, while the state-owned part of the business grew by 23%.
2003
The government claims that the grim annual figures for 2003 were largely the result of the national strike that began in late 2002 and continued until the beginning of February 2003. Yet, with no strike, and buoyant oil prices, the economy had contracted by 8.9% in 2002. The 2002/03 strike forced the government to adopt currency and price controls, which further damaged the economy. These controls limited inflation, but at the expense of creating shortages.
The all-important oil sector contracted by 10.7% in 2003 because of the time it took for the state oil company, Petróleos de Venezuela, to get oil production back to pre-strike levels. The strike ended at the beginning of February 2003. The bank pointed out that the oil industry recovered sharply towards the end of the year. The non-oil part of the economy was down by 8%. The most appalling performances came from construction (down 37.4%), retailing (down 12%) and manufacturing (down 10.6%).
The balance of payments ended 2003 with an overall surplus of US$5.4bn, while the current account was in surplus to the tune of US$9.6bn, thanks to feeble imports (down 21.4%). Oil exports were actually down by 3.2% last year, reflecting the lower export volumes, which more than offset higher oil prices. Private-sector exports rose 31.6%, the central bank reported.
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