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Weekly Report - 26 March 2009 (WR-09-12)

VENEZUELA: Chávez opts for belt-tightening after all

President Hugo Chávez had for six months turned a blind eye to the flurry of fiscal stimulus packages being implemented across the region to confront the global financial crisis and economic slowdown. He even averred that Venezuela would be fine if the price of crude fell to zero. Now, with the referendum securing his bid to seek re-election in 2012 safely out of the way, he has changed his mind. Chávez approved a series of what he termed “anti-cyclical and anti-crisis measures" this week, including cutting the budget by 6.7% and increasing value added tax (IVA) from 9% to 12%.

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