Economy - overview The petroleum sector dominates the economy, accounting for 27% of GDP, 78% of export earnings, and more than half of government operating revenues. It is likely to become even more important as the state petroleum company plans to double its production over the next 10 years. Realizing the failure of interventionist policies, the CALDERA administration embarked on a comprehensive economic reform program, which included negotiation of a stand-by agreement with the IMF in 1996, elimination of price and exchange controls, and revitalization of Venezuela's stalled privatization program. The influx of foreign capital, and the currency depreciation that followed exchange liberalization, led to 103% inflation in 1996, the highest in Venezuelan history. The government stepped in toward the end of 1996, propping up the Bolivar by using a stable nominal exchange rate as a restraint on inflation - which fell in 1997 to 38%. The macroeconomic adjustments, bolstered by strong oil prices, resulted in strong growth in 1997. However, the East Asian financial crisis and the decline of international oil prices toward the end of 1997 brought pressure on the currency, which Caracas was able to stave off. Caracas readjusted its exchange rate bands and began to allow quicker depreciation of the Bolivar; the government also tightened monetary policy. Concerned over potential revenue shortfalls from soft oil prices for the 1998 budget, Caracas has implemented budget cuts to compensate for previously optimistic oil revenue estimates. The government also has pushed ahead with sale of the state-owned steel company and the strategic aluminum sector, thereby reassuring domestic and international investors of Venezuela's commitment to reform. The monetary and fiscal measures have been well received by the international financial community. As a result, financial analysts believe the economy will still grow at a healthy pace in 1998, though they have lowered their initial projections for GDP growth due to the soft oil market.

GDP purchasing power parity - $185 billion (1997 est.)

GDP - real growth rate 5% (1997)

GDP - per capita purchasing power parity - $8,300 (1997 est.)

GDP - composition by sector
agriculture: 4%
industry: 63%
services: 33% (1997 est.)

Inflation rate - consumer price index 38% (1997)

Labor force
total: 9.2 million
by occupation: services 64%, industry 23%, agriculture 13% (1997 est.)

Unemployment rate 11.5% (1997 est.)

Budget
revenues: $11.99 billion
expenditures: $11.48 billion, including capital expenditures of $3 billion (1996 est.)

Industries petroleum, iron ore mining, construction materials, food processing, textiles, steel, aluminum, motor vehicle assembly

Industrial production growth rate 0.5% (1995 est.)

Electricity - capacity 18.975 million kW (1995)

Electricity - production 74 billion kWh (1995)

Electricity - consumption per capita 3,508 kWh (1995)

Agriculture - products corn, sorghum, sugarcane, rice, bananas, vegetables, coffee; beef, pork, milk, eggs; fish

Exports
total value: $20.8 billion (f.o.b., 1996)
commodities: petroleum 78%, bauxite and aluminum, steel, chemicals, agricultural products, basic manufactures
partners: US and Puerto Rico 55%, Japan, Netherlands, Italy

Imports
total value: $10.5 billion (f.o.b., 1996)
commodities: raw materials, machinery and equipment, transport equipment, construction materials
partners: US 40%, Germany, Japan, Netherlands, Canada

Debt - external $26.5 billion (1996)

Economic aid
recipient: ODA, $46 million (1993)

Currency 1 bolivar (Bs) = 100 centimos

Exchange rates bolivares (Bs) per US$1 - 507.447 (January 1998), 488.635 (1997), 417.333 (1996), 176.843 (1995), 148.503 (1994), 90.826 (1993)

Fiscal year calendar year

NOTE: The information regarding Venezuela on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Venezuela Economy 1998 information contained here. All suggestions for corrections of any errors about Venezuela Economy 1998 should be addressed to the CIA.