BBV's Banco Provincial Sees Venezuela 1st Quarter GDP -42.4%-Paper

sg.biz.yahoo.com Monday March 10, 11:17 PM

CARACAS -(Dow Jones)- Banco Bilbao Vizacaya Argentaria SA's (BBV) Venezuelan subsidiary forecasts a first quarter economic contraction of 42.4% in the country, local daily El Universal reported Monday.

The oil sector, which accounts for about a third of gross domestic product, will shrink 69.3% and the remainder will contract 32.5%, Banco Provincial's predicts, according to the report.

Provincial officials couldn't be reached for confirmation and further comment.

The report follows a 40% contraction forecast for the period made earlier by Banco Santander Central Hispano SA (STD).

Venezuela's economy has slowed dramatically after a devastating general strike against President Hugo Chavez's leadership began Dec. 2.

Most have returned to work but the two-month strike affected the economy to such an extent that the government was forced to halt foreign exchange sales to protect reserves, and impose price controls to curb soaring inflation.

The economy shrank about 9% last year, compared with 2.8% growth in 2001 and 3.2% growth in 2000.

El Universal Web site: www.eluniversal.com

-By Jehan Senaratna, Dow Jones Newswires; 58212-564-1339; jehan.senaratna@dowjones.com