INE statistics show a reduction of unemployment expected to continue rising

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 30, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: According to official figures issued by the National Institute of Statistics, the unemployment rate came to 19.8%, meaning 2.3 million of the approximately 12 million members of the country's labor force are out of work. The figure for the first quarter of last year was 15.1%, meaning that another 640,000 people have lost their jobs during the period. February's unemployment rate was 20.7%, but that has not brought much of a reduction in absolute numbers, given the expectations for the rest of the year.

However, some institutions like the Venezuelan Workers' Confederation (CTV) insist that the INE's statistics are skewed, and underestimate the number of people out of work. The labor movement calculates a 25% unemployment rate, with about 3 million people jobless.

Our estimates put the unemployment rate in the neighborhood of 25% as of the end of this year. The projected upward trend is based on the enormous contraction of the Venezuelan economy, which will undoubtedly continue through the end of the year, though to a lesser extent than in the first quarter.

The year-end unemployment rate will depend on the government's ability to take measures that enhance confidence among the economic agents, and to relax the foreign exchange restriction under which the economy is laboring, so that companies will be in a position to create new jobs, and hence, improve the Venezuelan people's deeply depressed standard of living.