Re: Chavez plays his card
Venezuelan 1st-Qtr GDP Grows 9.4 Percent on Oil Surge (Update1)
May 16 (Bloomberg) -- Venezuela's economy grew more than 9 percent for a fourth straight quarter in the January-through- March period as President Hugo Chavez boosted spending on food and medical services and scholarships for literacy classes and job training.
Gross domestic product, the broadest measure of a country's production of goods and services, expanded 9.4 percent in the first quarter from the year-earlier period after growing 10.2 percent in the fourth quarter and 9.8 percent in the third, the central bank said.
Venezuela, South American's largest oil exporter, has become one of the fastest growing economies in the world on the back of the oil price surge. The country's oil exports jumped to a record $13.9 billion in the first quarter, bolstering government coffers.
``The oil bonanza continues,'' said Asdrubal Oliveros, an analyst with Santander Investment in Caracas. ``High oil prices are fueling the increased spending, which in turn fuels consumer demand.''
JPMorgan Chase & Co. estimates that Chavez, who faces re- election in December, increased government spending 70 percent in the first quarter after boosting it 43 percent last year. The central bank has not yet released government spending figures for this year.
DirecTV's Sales
``Spending is unlikely to slow in the remainder of the year as President Chavez uses the oil windfall to secure his re- election in December,'' JPMorgan wrote in a report released earlier this month. The bank forecasts Venezuela's economy will expand 6.5 percent this year after growing 9.3 percent in 2005.
Higher government spending is helping buoy sales for DirecTV Group Inc. in Venezuela, said Francisco Trujillo, the commercial vice president for the company's local unit. The satellite-TV provider expects to increase its number of subscribers in Venezuela by as much as 20 percent to about 400,000 this year, a record high, Trujillo said.
``The increased spending helps everyone,'' Trujillo said in a telephone interview.
Oil industry production, refining and marketing fell 0.2 percent in Venezuela, the world's fifth-largest crude exporter, while non-oil GDP grew 11 percent, the central bank said. Construction expanded 21 percent and manufacturing jumped 9.4 percent during the first quarter, the bank said.
The surplus of the current account, the broadest measure of a country's trade in goods and services, grew to $7.4 billion in the first quarter from $4.7 billion in the year-ago period, the bank said. The current account surplus for 2005 rose 84 percent to a record $25.4 billion.
The capital account, which measures investment flows, had a deficit of $6.3 billion in the first quarter, the highest level since the bank began reporting quarterly balance of payment figures in 1997. The capital account deficit for 2005 was $16.2 billion, also a record.
