Venezuela: Economic activity maintains strong momentum in fourth quarter
February 26, 2013
In the fourth quarter, GDP expanded 5.5% over the same quarter the previous year, based on preliminary estimates released by the Central Bank on 26 February. The print matched the result observed in the previous three-month period (previously reported: +5.2% year-on-year) and overshot the 5.0% expansion projected by last month's LatinFocus Consensus Forecast. In the full year 2012, GDP expanded 5.6%, which is a notch above the 5.5% rise reported in the 27 December estimate and above the 4.2% expansion recorded in 2011.
Economic growth in the last quarter of 2012 mainly reflected how healthy domestic demand offset a deteriorating performance in the external sector. Private consumption (Q3 2012: +7.8% yoy; Q4 2012: +7.1% yoy) and public spending (Q3: +7.3% yoy; Q4: +6.5% yoy) both lost some steam. On the other hand, gross fixed investment accelerated strongly from a 15.6% rise in the third quarter to a stunning 32.9% increase in the fourth, causing domestic demand to accelerate in Q4.
On the external front, exports expanded 7.5% (Q3: -2.1% yoy), while imports accelerated further to a 24.7% increase (Q3: +19.8% yoy). As a result, the external sector's net contribution to overall growth deteriorated from minus 8.9 percentage points in the third quarter to minus 9.8 percentage points in the fourth.
The 2013 budget assumes the economy will grow 6.0% this year. LatinFocus Consensus Forecast panellists, however, are much less optimistic and expect GDP to expand only 1.3% this year, which is down 0.2 percentage points from last month's projection. Next year, the panel sees economic growth at 2.5%.