Venezuela: Economic growth inches down in Q4
April 24, 2014
In Q4, GDP expanded 1.0% over the same quarter of the previous year, according to a preliminary estimate released by the Central Bank on 24 April. The print marked a slight deceleration over the 1.1% increase tallied in Q3 and undershot the 1.4% rise market analysts had expected. In the full year 2013, GDP expanded 1.3%, which was well below the 5.6% tallied in 2012.
The slowdown recorded in Q4 reflected a deterioration in domestic demand. Private consumption growth accelerated from 4.3% in Q3 to 5.8% in Q4, while government spending expanded 3.6% (Q3: +2.8% year-on-year). Conversely, gross fixed investment plummeted 16.6% in Q4 (Q3: -12.1% yoy), marking the sharpest drop since Q1 2010. In addition, GDP was dragged down by a pronounced destocking process, which caused total investment to plunge 27.8% in Q4 (Q3: -16.8% yoy).
On the external front, exports of goods and services declined 6.8% over the same period of the previous year (Q3: -9.7% yoy). Meanwhile, imports contracted at the fastest pace since Q1 2010, falling 20.3% (Q3: -13.8% yoy). As a result of the sharp contraction in imports, the external sector's net contribution to overall growth improved from 6.0 percentage points in Q3 to 9.5 percentage points in Q4.
The country's 2014 budget projects that the economy will grow between 4.0% and 6.0% this year. LatinFocus Consensus Forecast panelists, however, expect GDP to contract 1.2% this year, which is down 0.4 percentage points from last month's projection. Next year, the panel sees economic growth at 1.5%.