Venezuelan economy shrinks 8.9% in 2002

www.vheadline.com Posted: Monday, February 17, 2003 By: Robert Rudnicki

The Venezuelan economy is reported to have shrunk by 8.9% over 2002, with the key driver for the contraction being a opposition-led work stoppage which commenced on December 2 and closed down the vital petroleum industry as well as many other sectors of the economy.

During the fourth quarter of 2002 the economy contracted by a whopping 16.7% following a 26% fall in the oil sector as thousands of Petroleos de Venezuela (PDVSA) workers walked out on their jobs to support the Coordinadora Democratica political action.

• Since the work stoppage came to an end on February 4, oil production has slowly but surely shown signs of recovery, with estimates now at between 1.4 million and 1.9 million barrels per day.

This recovery in production is likely to soften the blow of the strike on this quarter's figures, however the contraction is still expected to be high, with a possible recovery only likely during the second quarter.