Strike-hit Venezuela says to cut budget by 10 pct

www.forbes.com Reuters, 01.22.03, 12:34 PM ET

CARACAS, Venezuela, Jan 22 (Reuters) - Finance Minister Tobias Nobrega on Wednesday said the government plans a 10 percent cut in its 2003 budget as it seeks to counter an opposition strike bleeding its oil-reliant economy.

The budget cut would be equal to about 4 trillion bolivars, or $2.2 billion.

Nobrega said the government would continue with an internal public debt swap and restructuring program to smooth out debt commitments in the world's No. 5 oil exporter. In November, Venezuela swapped about $2 billion in debt to ease a crunch in its primary payments and servicing.

The minister said the government also plans to extend an existing temporary bank debit tax, introduced last May to help cover fiscal needs. Nobrega said the tax would continue but at a lower rate.

The strike, started by opposition leaders seeking to force leftist president Hugo Chavez from office, has slashed oil output. Oil provides about half of all government revenue.

The Venezuelan economy contracted sharply last year after Chavez survived a brief coup. ($1 = 1,853 bolivars).