Venezuela economic rose 5.2% in the last quarter over last year’s figures. The officials thanked private sector as well as increased government spending. With this development, the country has become the highest growing economies in Latin America. Its economy improved at a faster rate than 2011’s Q3, when the expansion stood at 4.4%. Jorge Giordani, Venezuela Planning Minister said that country has entered a new era in its steady and stable growth at a press meeting where he along with Central Bank president displayed the third quarter results.
The nation’s economy has now been improving for 8 straight quarters and bank reported the strong and sustainable growth between July and Sept was due in part to more demands of raw materials and imported goods, plus increased government spending on public housing schemes. The home market is seeing the growth and it came even before the October 7 presidential election, when Hugo Chavez was elected for the second time to next 6-year duration. Official’s credited to government’s housing projects as due to it construction segment earned 12.6% growth in the third quarter. Apart from housing market, strong consumer spending and more money in the economy boosted division growth of 5.7%, while a public sector grew at the rate of 3.4
The larger sum of cash in the market propelled imports that expanded 17% during the last quarter compared to the same time in last year. Even the banking sector grew at the steady rate of nearly 36%. Venezuela is one of the major oil makers and relatively high fuel prices helped it to add more on revenues that in turn prompted government to spend more. In Q3, nation’s non-oil sector rose 5.4%, surprisingly outsmarting oil sector by 1.1%. The growth has been propelled largely by government spending, which has expanded nearly 20% this year until date, according to consulting firm Econometrica economist and director, Angel Garcia Banchs. He pointed that such fast performance is not sustainable, mentioning government shortage problems and banking as well as construction industries that aren’t enough capable of surviving with such growth.
Moreover, country hasn’t solved currency issues, which could further complicate the issue in future. It holds strict currency exchange to businesses as well as Venezuelans. The shortage of currency has provoked a drop in the worth of the bolivar on the black market segment, where US currency is getting three times the normal rate.