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Investment
growth
strong
Trade
data indicate that imports of capital goods rose 191.7% in the third
quarter over the same quarter in 2003. The
third quarter figure was well ahead of the already robust 119.7% growth
pace observed the previous quarter.
The third quarter investment expansion was principally in the
non-oil sector, where capital goods imports were up 214.0% (Q2: +127.3%
yoy).
In the oil sector, investment measured in capital goods imports
actually declined 18.2% (Q2: +8.3% yoy).
Outlook
upgraded amid resilience of recovery
Consensus
Forecast participants expect economic growth to slow notably in the final
quarter of the year to a 4.1% pace.
Nevertheless, the strong double-digit expansions in the economy in
the first three quarters of the year are likely to lift the annual growth
rate notably.
In fact, Consensus Forecast panellists expect GDP to grow 13.8%
this year, which is up 1.6 percentage points from last month’s forecast
and is well ahead of the government’s growth estimate of 11.0%.
The anticipated moderation in growth in the final quarter is likely
to carry over into next year, as economic activity will grow a much more
moderate 4.3%, below government officials’ anticipated 5.0% expansion
but 0.5 percentage points above last month’s Consensus Forecast estimate.
Current
account surplus rises amid stronger export growth
The
current account balance incurred a surplus of US$ 4.1 billion in the third
quarter.
The third quarter surplus was above the US$ 3.8 billion surplus
registered in the third quarter last year and above the US$ 3.4 billion
surplus observed in the second quarter.
A notable rise in the trade surplus was principally responsible for
the increase in the current account surplus over the same period last year.
In the third quarter, the trade surplus widened to US$ 6.0 billion,
compared to a US$ 5.0 billion surplus in the same quarter last year.
The higher trade surplus reflected a strong increase in exports
(+43.3% year-on-year) in the wake of the stronger oil price and rising
global demand.
Oil exports rose 36.7% over the third quarter last year (Q2: 32.1%
yoy), while non-oil exports surged 29.8% for the same period (Q2: 34.4%
yoy).
Imports grew at an even faster pace of 59.9%.
The third quarter current account figure raised the annual current
account surplus from US$ 14.1 billion in the second quarter to US$ 14.4
billion.
Nonetheless, Consensus Forecast participants expect the current
account surplus to narrow in the final quarter of the year to reach US$
12.2 billion.
Next year, the current account surplus is anticipated to drop
further to reach US$ 8.4 billion.
President
Chávez appoints new Finance Minister
On
6 December, President Chávez announced that Nelson Merentes would take
over the Finance Minister portfolio from Tobías Nóbrega.
The Nóbrega departure implies that he may be slated for
appointment as the new Central Bank president to replace Diego Luis
Castellanos whose term runs out on 28 January.
The incoming Finance Minister Merentes will be leaving his post as
head of the Ministry of Development Financing (MFD, Ministerio
de Financiamiento al Desarrollo) and president of the State
Development Bank (BANDES, Banco
de Desarrollo Económico y Social).
He was also Finance Minister earlier in the current
administration’s term from July 2001 to February 2002.
Unlike the more technocratic Nóbrega, Merentes is a very close
ally of Chávez.
Nevertheless, he is generally expected stay the course on economic
policy and to continue the government’s more active debt management
strategy. |
