Venezuela: GDP remains resilient in second quarter
August 17, 2012
In the second quarter, GDP grew 5.4% over the same quarter last year, based on preliminary estimates released by the Central Bank on 17 August. The print came in below the 5.8% increase seen in the first quarter (previously reported: +5.6% year-on-year) which had marked the strongest quarterly gain since Q2 2008. The reading was broadly in line with the 5.2% expansion projected by last month's Consensus Forecast. Economic growth slowed somewhat in the second quarter due to less robust growth in domestic demand (Q1 2012: +16.4% year-on-year; Q2 2012: +13.1% yoy), whereas the external sector improved slightly. Private consumption increased 6.8% (Q1: +5.7% yoy), while public spending accelerated to a 5.7% pace (Q1: +5.0% yoy). The government has increased spending ahead of the 7 October presidential elections, thereby boosting economic growth in recent quarters. On the other hand, gross fixed investment slowed from a hefty 21.8% rise in the first quarter to a 15.9% increase in the second. On the external front, exports fell 6.4% in the second quarter (Q1: +1.7% yoy), while imports slowed to a 24.6% rise (Q1: +38.7% yoy). As a result, the external sector's net contribution to overall growth improved from minus 14.0 percentage points in the first quarter to minus 11.3 percentage points in the second.