CARACAS (Reuters) – Venezuela’s President Nicolas Maduro announced during his annual address to the government-allied legislature that the country’s economy grew by more than 5% in 2023 and is projected to reach 8% growth in the current year.
The Venezuelan economy has been in a state of prolonged meltdown, characterized by triple-digit inflation and a widespread exodus of millions of migrants in search of better opportunities elsewhere. However, the inflation rate in the country is no longer the highest in Latin America, as Argentina’s inflation has surpassed 200%
In 2023, inflation in Venezuela was just under 190%, a slight decrease from 234% the previous year, as reported by the central bank.
Maduro stated to lawmakers, “In 2024 we will continue the policy of stoking national production, of recovering national income, of recovering income for workers. For this year we project a gross domestic product growth of around 8%.”
According to Maduro, the growth rate was 15% in 2022. He also mentioned that inflation would be in the two digits for the current year.
Maduro added that the state oil company PDVSA contributed $6.23 billion to the country’s coffers last year, stating that the funds were used for salaries, healthcare, education, and housing. However, this figure corresponds to what the company handed over to the government, not total earnings.
A document seen by Reuters suggested that the government expects a 27% increase in income from PDVSA this year, despite stagnant production and relaxation of U.S. sanctions.
The sanctions relief, set to last until April, has led to increased prices for Venezuelan crude, and analysts anticipate that it will result in more social spending in the run-up to a presidential election.
In the past, oil income in Venezuela has been affected by low production due to deteriorated infrastructure and lack of investment.
Maduro’s administration estimates total spending in 2024 will be equivalent to $20.5 billion, and income from oil exports and taxes paid by PDVSA would cover 58%, according to a document seen in December.
The U.S. eased sanctions in October after the Venezuelan government signed an elections deal with the opposition. In December, U.S. President Joe Biden granted clemency to a Maduro ally in exchange for the release of 10 Americans and at least 24 opposition-linked Venezuelans.
Although a date for the election has not been set, it is anticipated to take place in the second half of the year. (Reporting by Mayela Armas and Julia Symmes Cobb, additional reporting by Deisy Buitrago)
