The Venezuelan Finance Observatory (OVF), an independent body, registered an 8.3 percent drop in Venezuelan economic activity in this first quarter of 2023.
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This indicator shows that the slowdown in the rate of production of goods and services that have been appreciating since the second quarter of 2022 has strengthened, so the start of another recessive cycle in the Venezuelan economy would not be far off.
In data, this has been the record:
· First quarter 2022: 18.6%.
· Second quarter 2022: 15.8%.
· Third quarter 2022: 11.5%.
· Fourth quarter 2022: 9.15%.
· First quarter 2023: -8.3%.
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The OVF has warned that although in 2022 the country’s economic growth was 13.3 percent, this was produced by the oil recovery, but then the slowdown began to be observed due to failures in other areas such as the trade sector. .
This is how the Venezuelan economy closed the first quarter of 2023.
1. Economic Activity fell 8.3%.
2. Inflation 501% in March 2023 compared to March 2022
3. Trade sales fell 13.3%
4. The BCV lost $311 million
5. The exchange rate depreciated 41.7%
6. The minimum wage is $5— Jose Guerra (@JoseAGuerra) April 27, 2023
From the point of view of supply, the main engine that drives the economy is oil production and this during the first quarter of 2023 showed a drop when compared to the first quarter of 2022.
Despite the significant increase in the extraction of crude oil by Chevron, going from 50,000 barrels daily in 2022 to more than 900,000 barrels per day during the first quarter of 2023, which shows that PDVSA’s own effort fell sharply, the OVF explains on its website.
The OVF, made up of academics, highlights that Conindustria -Venezuela’s fundamental industrial chamber- reiterated that the first quarter of 2023 had not been good and that it expected a recovery for the second quarter, however its reduction volume indicator corresponding to January from 2023 decreased 5.3 percent.
According to the Ecoanalítica firm, only in the Metropolitan Area of Caracas, sales in stores decreased 13.3 percent and the same OVF appreciated a stagnation in the remuneration of workers in the commerce and services sector in that geographical area.
An additional comment to understand the Chevron issue and the exchange market: the first thing is that the license prevents Chevron from delivering foreign currency to the Maduro government.
However, Chevron has to comply with commitments in bolivars within the framework of the joint venture and therefore… https://t.co/MWcB62tBAh— Asdrúbal R. Oliveros (@aroliveros) April 24, 2023
Another aspect that influences the fall is that government spending during the first quarter denoted a fall in real terms, due to inflation of 501 percent in the first quarter of 2023.
“The VAT collection reported by the Seniat superintendent via twitter presents serious inconsistencies, firstly because it is not published in an Excel file or another format with a sufficient level of detail, and secondly because it is a nominal reference that needs to be adjusted by inflation, like bank credit”, records the OVF.
ANA MARIA RODRIGUEZ BRAZON
WEATHER CORRESPONDENT
CARACAS
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