|Written by Victor Quiroga|
|Monday, 16 September 2013 18:36|
The economic situation of Venezuela is getting worse. Inflation speeds and isa direct attack on workers’ pockets. When the price of needed goods goes up, be it food, or clothing, or medication, or travel costs, or education of children, the wage loses purchasing power.
According to theNational Statistics Institute (INE) of Venezuela, if things remain like it is currently the inflation rate would overcome 39% by the end of this year.
The famous scarcity index is around 19% and, according to economic analysts, the economy growth in the first quarter of the year was 0.7%, almost nothing and quite far away from the official figures that were predicting a significant annual growth of 6 %.
According to Ecolatina, the forecast for this year is that the external indebtedness will be around US$ 8 billion and domestic indebtedness just over US$ 49 billion. This same agency ensures that public spending (i.e., investments that the state makes in wages, health, housing, education, etc…) will decline 11% this year compared to previous years, sharing 51.5% of GDP. Although the foreign debt total figures are not explicit, it would be around US$ 130 billion.
The president of FEDECAMARAS, Jorge Roig, stated that there is a fall in the countryside production and a standstill of the industrial sector of around 60%. (El Universal).
In turn, the consultant Ecolatina ensures that Nicolás Maduro’s government “has given signs of economic pragmatism and made an approximation towards the private sector, which, though tiny, may indicate that this new administration search channels for a less radical economic policy and that it could return room to the private sector and would lead to the enforcement of a more cautious fiscal management”. In other words, for this advisory business, the government “is going through the good way” to respond to employers’ interests. However it is not all of the figures that are falling down, the bankers are celebrating. The financial activity (banks) grew in the last year over 31%!
What do all these numbers mean?
First, inflation, as we have denounced in these pages, devours our salaries. The miserable salary increase given in installments has already been devoured, including the 10% that will be given in September. Second, it starts an economic slowdown with an insignificant growth, which can also represent that employment is not going to grow up, or even worse, that layoffs may occur. Third, the reduction in public spending, i.e. investment in education, health, in the missions, etc. begins to slow or stop. In this regard the daily press speaks of a 9% cut in public spending at the closing of the first half of the year (El Universal August 19, 2013).