Data vs Reality: What Is Happening With Venezuela’s Economy?
Misión Verdad, Orinoco Tribune, July 15, 2023 —
During the last few months, several economic analysis firms in Venezuela have issued very negative reports and perspectives about the performance of the Venezuelan economy in 2023.
Asdrúbal Oliveros, from Ecoanalítica, has talked about an economic “slowdown.”
Henkel García, in charge of the firm AlbusData and member of far-right politician María Corina Machado’s “economic team,” has indicated “inertia” and “deceleration” throughout the year.
Luis Vicente León, president of the firm Datanálisis, has reached the paroxysm of qualifying the situation as “recession.”
Most of the forecasts have emphasized a deceleration of economic momentum since last year, and some analyses have claimed that the economy is in recession or is very close to falling back into recession.
However, in contrast to these estimates, both official sources and several business and commerce chambers have presented a very different picture in their reports at the end of the second half of the year.
Data and perspectives
President Nicolás Maduro announced that complementary imports in Venezuela have recorded an increase of 23% in the first half of 2023.
He asserted that the economy continues to maintain a momentum of recovery, and explained that this significant increase in imports is in step with his policies to protect national production. He added that imported products cover part of the national requirement that is not satisfied by national industrial production.
“The country needs complementary imports, but we have to increase and protect national production,” the president stated during a broadcast of his TV program Con Maduro+.
“We have a foolproof economic strategy,” President Maduro said. He reported that during the first semester, 49,300 containers with complementary imports entered the country, which was a significant increase compared to 2022, when 38,400 containers entered the country.
Venezuela also maintains 97% of the supply for the domestic market demand, the highest in the last 22 years, said the president.
The president’s statements are bolstered by other indicators pointed out by several Chambers of Commerce. All these indicators present a comprehensive picture of the consumption pattern that continues to shape the Venezuelan economy.
Recently, the executive director of the Venezuelan Chamber of Shopping Malls (CAVECECO), Claudia Itriago, reported, “We have had a recovery of 40% in sales during this first semester of the year, compared to the first semester of the year 2022.”
Itriago stated that at the end of the previous fiscal year, the national average of unemployment in shopping malls was 15%, while at present it is 12%, which reflects an improvement in the sector equivalent to a 25% increase in employment in commercial business.
The CAVECECO director provided additional important data that illustrate the dynamism of commercial activity. “In the post-pandemic period, we had a reduction of between 100,000 and 120,000 jobs, but today we are back to 620,000 jobs, and now during vacations it increases a little more because students work part-time to have some income,” she explained.
She further stated that recently, in business meetings in Colombia, she witnessed several Colombian brands that plan to resume their activities in Venezuela.
Ítalo Atencio, president of the National Association of Supermarkets and Self-Service Stores (ANSA), said that by the second half of 2023, consumption in the sector would grow 6%.
He explained that between January and June 2023, compared to the same period of 2022, there was a 6% growth in 113 categories in the sector. According to him, it is evident that consumption in supermarkets did not go into negative figures in the first half of the year, as several economic analysis firms had forecast.
However, Atencio added that, although the economy continues to grow, the amount of growth would not be the same as last year.
Carlos Fernández, president of the Federation of Chambers and Associations of Commerce and Production of Venezuela (Fedecámaras), said the Venezuelan economy would have a “modest” growth of 3 or 4 points in Gross Domestic Product (GDP).
He said that the economy will continue to grow, but pessimistically emphasized that it will be a “modest” growth.
If this really happens by the end of the year, it will be evident that the Venezuelan economy slowed down, but it would still be among the best performing economies in the region this year. The Economic Commission for Latin America and the Caribbean (ECLAC) forecast in April that Latin American economies would grow an average of only 1.2% this year, in a context of great “uncertainty.”
Unjustifiable mismatch
It seems that several economic analysis firms, which have deployed their own measures and methods to calculate consumption and growth, have a significant mismatch with the data and reports provided by both the Venezuelan government and the commercial and business chambers of the private sector.
The work of these analysis firms, in many cases, is based on the construction of public opinion on economic issues, but now they are being contradicted not only by the official data but also by the data provided by the private sector, which are precisely the potential clients of these analysis firms. This situation leaves these analytical firms in a very bad light.
Such a mismatch, technically unjustifiable, could be explained by possible behind-the-scenes political interests, such as generating pessimism, uncertainty, and tension among the population in the run-up to the presidential elections next year.