Venezuela: Venezuelan economy continues to gain momentum in fourth quarter
February 22, 2012
In the fourth quarter, GDP grew 4.9% over the same quarter the year before, based on preliminary estimates released by the Central Bank of Venezuela (Banco Central de Venezuela) on 22 February. The print came in above both the 4.4% increase seen in the third quarter (previously reported: +4.2% year-on-year) and the 4.5% growth expected by the market. In fact, the Q4 outturn represents the strongest quarterly growth recorded since Q2 2008. Domestic demand rose 9.1% year-on-year in the fourth quarter (Q3: +9.1% yoy), partially due to strong public spending ahead of this year's presidential elections. Total consumption improved in the fourth quarter, with private consumption rising 5.3% (Q3: +4.4% yoy) and government spending growing 5.8% (Q3: +4.8% yoy). Furthermore, fixed investment climbed a strong 11.6% (Q3: +3.3% yoy), the fastest expansion seen in two years. However, total investment was dragged down by lower stockpiling. On the external front, exports declined for the first time in five quarters, falling 1.8% (Q3: +6.4% yoy), while imports moderated to a 16.3% expansion (Q3: +19.7% yoy). As a result, the external sector's net contribution to overall growth improved slightly, from minus 7.1 percentage points in the third quarter to minus 6.6 percentage points in the fourth. In the full year 2011, the economy grew 4.2% (2010: -1.5% yoy) after contracting in the previous two years.