Weekly Report - 11 March 2010 (WR-10-10)

VENEZUELA | GDP contracts sharply. The economy contracted by 3.3% in 2009, after five straight years of growth, according to the central bank. In the final quarter of 2009 GDP fell by 5.8% compared with the same period a year earlier. Oil-related GDP fell 7.2%. Non-oil GDP was down by 4% in the fourth quarter and 2% for the year: retailing fell by 13.9% and manufacturing by 6.9% in 2009, while non-tradables grew.With oil prices still low, the government is only predicting growth of 0.5% in 2010. There was a balance of payments deficit of US$10.26bn in 2009 after a surplus of US$9.28bn in 2008, showing how reliant Venezuela remains on high oil prices and the failure of the government, despite claims to the contrary, to diversify the export economy. Oil exports (90% of total exports) were down from US$87.44bn in 2008 to US$54.20bn in 2009. Inflation finished 2009 on 25.1% and, with January's devaluation, will remain high this year.