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Line 252:
Line 252: − [[File:Cathedral of Puerto Ayacucho, Amazonas, Venezuela.jpg|thumb|300px|Puerto Ayacucho, Amazonas.]] − Real GDP increased by 10.3% in 2006. The economy recovered strongly in 2004 (17.9%) and 2005 (9.3%) after two consecutive years of deep economic recession (in 2003, Venezuelan GDP contracted 7.7%, after contracting 8.9% in 2002). The economic recovery has been driven by a large increase in government expenditures, based on an oil windfall, which in turn generated higher consumption levels. − The Consumer Price Index increase was approximately 17% at the end of 2006, following increases of 14.4% in 2006 and 19.2% in 2004. − − As of January 23, 2003, all foreign exchange requests must be approved by the National Exchange Control Administration (CADIVI) and the Central Bank (BCV) completes all legal purchase and sale of foreign currency. The current exchange control regime rates for U.S. dollar exchange rate are: Bs. 2,144.60=U.S. $1.00 for purchase operations, and Bs. 2,150=U.S. $1.00 for sale operations. The national budget for 2007 assumes that the government will not devalue this year. Nonetheless, some local economists expect devaluation in late 2007 due to the increasing disparity between official and parallel market rates. − − Central Bank-held international reserves increased to over U.S. $36 billion at the end of 2006. The reserves would have been higher, but the BCV transferred $6 billion to the National Development Fund (FONDEN) during the last quarter 2005, as directed by the Central Bank Law (July 2005) and an additional $4.3 billion in 2006. The level of international reserves is expected to decrease during 2007 after additional transfers of foreign reserves to FONDEN and because the Central Bank Law established that state-owned oil company PDVSA will only transfer the foreign exchange earnings needed for its domestic expenses, taxes, royalties, and dividends to the BCV, and would transfer the rest to FONDEN. − [[Image:Canaima Venezuela.jpg|thumb|250px|Canaima]] − − Venezuelan sovereign debt, both domestic and foreign, has decreased in recent years in both absolute terms and as a percentage of GDP. Venezuela's external debt/GDP ratio of approximately 16% is low by Latin American standards. Venezuela's Emerging Markets Bond Index investment risk rating, at 202 basis points, dropped somewhat over 2005, but remained higher than many in the region. − − There is considerable income inequality. The Gini coefficient was 0.45 during 2006. According to government statistics, the percentages of poor and extremely poor among Venezuelan population were 33.9% and 23.2%, respectively, in 2006. These high ratios are due primarily to lower real wages earned by employees, and high rates of un- and underemployment. On the other hand, the government of [[Hugo Chavez]] increased social spending and subsidised food and education. Under Chavez, the poverty rate also decreased from 55.1 percent in 2003 to 30.4 percent in 2006.<ref>[http://www.cepr.net/documents/publications/venezuela_2007_07.pdf The Venezuelan Economy in the Chávez Years]</ref> − − Starting January 1, 2008 Venezuela will adopt the "Bolívar Fuerte" as its new currency. The new Bolívar eliminates the three zeros of the older currency. For example, 50,000 Bolívars are equal to 50 Bolívar Fuertes. − − Although economic growth has been impressive, as a result of the oil windfall, many in the Venezuelan business community remain very concerned about President Chavez' vision for 21st Century Socialism and what it portends for the private sector.
→Economy: mv to History of Venezuela
==Economy==
==Economy==
===Petroleum and [[REMs]]===
===Petroleum and [[REMs]]===