Venezuela Reports Grim Details of Hyperinflation, GDP Plunge
Venezuela Reports Grim Details of Hyperinflation, GDP Plunge
(Bloomberg) -- Venezuela’s central bank published key economic data for the first time since 2015, reporting figures on gross domestic product, external accounts and inflation that might be expected from an economy devastated by war rather than one boasting the world’s largest oil reserves.
Inflation spiraled out of control to 130,060% in 2018 and hit 862.6% in 2017, while the economy shrank 22.5% during the third quarter of 2018 from same period in 2017, the bank said in a report posted on its website Tuesday.
The report on the economy was the bank’s first major publication of indicators in over three years, illustrating in painful detail the depth of Venezuela’s collapse. In the absence of official figures, private economists and observers have tried to gauge the rise in prices and using indicators such as the cost of automobiles, black-market dollars, even groceries like eggs.
Nonetheless, while the publication describes an economy in the throes of an acute crisis, the data struck some long-time and informed Venezuela observers such as Asdrubal Oliveros, director of Ecoanalitica consulting firm in Caracas, as “implausible.”
"Obviously, inflation is underestimated," he said by telephone, reacting to the bank’s figures of 196.6%, 114.4%, 34.8% and 33.8% for January, February, March and April.
As a comparison, Bloomberg’s Cafe Con Leche Index shows Venezuela’s annual inflation rate at 144,637% whereas the International Monetary Fund projects a rate of over 1,000,000% for this year.
After Venezuela suspended the publication of growth and inflation data in the midst of the unprecedented crisis, the IMF warned of possible sanctions for withholding statistics and the central bank complied by sharing the figures with the Washington-based lender late last year.
As to output, the central bank’s third-quarter 2018 GDP figure is near the IMF’s projection for 2019 -- the fund has 2019 output falling 25% -- as are the 2016 and 2017 GDP data, with Venezuela reporting drops of 17% and 15.7% respectively.
Other data from the report:
- Oil activity plummeted 25.8% in 3Q 2018 and dropped 15.3% year-on-year in 2017 and 9.9% year-on-year in 2016.
- Oil exports reached $29.8 billion in 2018, a 5.6% contraction compared to the $31.5 billion in 2017 and a 15% increase from the $25.9 billion of 2016.
- Non-oil exports accumulated $3.16 billion in 2018, growing 72% compared to the $1.8 billion from 2017.
- Non-oil GDP registered a drop of 22% in 3Q 2018. Construction fell 67.9%, financial institutions and insurance declined 52.5% and manufacturing dropped 46.1%, the largest contractions when compared to the same period in 2017.
- Imports also experienced a 23.6% increase between 2017 and 2018, going from $12 billion to $14.8 billion. Oil imports represented $9 billion (60% of total imports).
--With assistance from Andrew Rosati.
To contact the reporter on this story: Alex Vasquez in Caracas Office at avasquez45@bloomberg.net
To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Robert Jameson, Jose Orozco
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