Maracaibo, January 5, 2023 (venezuelanalysis.com) – The Venezuelan Central Bank (BCV) reported 17.73 percent economic growth during the first nine months of 2022 in comparison to the same period in 2021.
“With this result, there have been five consecutive trimesters of positive variations in most economic activities, reflecting the favorable performance of the national production, which began in the third quarter of 2021,” the bank said in a statement.
The country’s non-oil activity grew 14.49 percent between January and September with the manufacturing sector increasing nearly 40 percent. The private sector accounted for 40.16 percent of the industrial rebound led by machinery, chemicals, metal, plastic, textile, leather products, and food production, while the public sector registered a 36.27 percent boost “mainly due to the reactivation of state companies such as Venalum, Alcasa, Pequiven, and Lácteos Los Andes.”
Other areas with production growth were transportation and storage (54.35 percent), construction (34.45 percent), and retail (25.28 percent). The BCV’s report also highlighted that exports and imports rose 32.57 and 11.43 percent, respectively.
In a recent interview, Venezuelan President Nicolás Maduro praised the economic progress as the result of “the country's productive forces being unleashed in 2022” amidst efforts to leave behind the oil-rentier model.
“For the first time in more than 100 years, [this] is a growth of the non-oil economy that produces food, goods, services, and wealth, and that pays taxes. We are breaking records in tax collection for the year 2022,” Maduro said on Sunday. The country’s tax office (SENIAT) announced it collected US $4.27 billion between January-November 2022, a 93 percent increase in comparison to the same period the year before.
Maduro added that Venezuela used to depend largely on food imports, but “today we produce 94 percent of the food that goes to Venezuelan homes. It is an agricultural miracle, the result of hundreds of rural producers' work.”
The president reiterated that while economic development has been important there was still a “big gap” to grow even more following the path of diversification.
“As we continue subjected to imperialist harassment and persecution, what could do us the most harm is to fall into dogmas. No! We have very clear objectives in the construction of a diversified, productive model. Venezuela is experiencing the first stage of a long cycle of recovery and structural growth, a new economy, and we are going to continue that path,” stressed the Venezuelan leader.
Asked about the monetary devaluation registered in the second half of 2022, Maduro pointed the finger at “open wounds” from the years-long economic war against the national currency. According to authorities, cryptocurrency exchanges are being used to inflate the exchange rate.
“We are going to control this situation and all the economic sectors and the government are going to build a stable exchange system to defend the currency,” Maduro pledged.
Despite measures to overcome the rentier economy, the oil industry’s recovery remains a priority in the governmental plan. In Sunday’s interview, President Maduro reiterated that energy companies from the US, Asia, and Europe are welcome to invest in Venezuela, recalling that the country has the world’s largest certified oil reserves and is currently certifying the fourth largest natural gas reserves.
According to the BCV report, Venezuela’s oil activity rose 27.09 percent between January and September 2022 following the "recovery of crude oil production capacity” starting in mid-2021. The Caribbean country’s output has experienced a moderate recovery but has remained mostly stagnated between 600,000-700,000 barrels per day (bpd) as the industry continues hindered under US sanctions. Exports had some peaks last year with the resumption of crude shipments to Europe.
However, production and export are expected to slightly increase after US corporation Chevron resumed operations in Venezuela following a limited sanctions waiver from the US Treasury Department obtained in November. On Tuesday, the oil giant shipped a 500,000-barrel cargo of Hamaca heavy crude loaded from existing inventory in the Petropiar joint venture (eastern Venezuela). Its destination was the company’s Pascagoula, Mississippi refinery.
This is the first US-bound shipment since 2018 following Washington’s financial sanctions against PDVSA the year prior. The measures were aggravated by the 2019 oil embargo as well as secondary sanctions and other threats levied throughout 2020.
Another Chevron-chartered vessel likewise arrived in Venezuelan waters carrying some 500,000 barrels of heavy naphtha that will be used to operate Petropiar's crude upgrader, Refinitiv Eikon data showed.
“[Chevron’s return] does not mean that any sanction has been lifted. The negotiations with them have taken place within the framework of the Constitution and I hope that all the projects and contracts that have been signed are effectively materialized,” explained Maduro during his interview.
The Chevron license responded to the resumption of the México-held dialogue process between the Maduro government and the US-backed opposition in November. New rounds of talks are yet to be announced as previously reached agreements are still in process and the right-wing negotiators have gone through internal turmoil.
On December 29, the three largest Venezuelan opposition groups voted to eliminate the self-proclaimed “interim government” led by Juan Guaidó in order to replace it with a five-person “Administration and Asset Protection Council” to manage Venezuelan frozen resources abroad. The move comes as the anti-Chavista forces prepare to hold primary elections in 2023 ahead of the presidential vote scheduled for 2024.
In response, US Department of State spokesman Ned Price stated that Washington will continue to recognize the 2015 National Assembly “as the last remaining democratic institution in Venezuela” and welcomed the agreement to extend its mandate.
For his part, President Maduro regretted that Washington remains “trapped in a senseless policy towards Venezuela by supporting non-existent institutions.” He restated that Caracas “is ready to take steps towards a process of normalization and regularization of diplomatic, consular and political relations” with the Biden administration on the basis of mutual respect.
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