Planning Minister Jorge Giordani claimed that Venezuelan
economy has entered a clear highway leading to sustained growth
over the next decade and consequently to a substantial increase
In an interview with official TV channel Venezolana de Televisión,
Giordani asserted: "We do not have a pretension to reach a
yearly growth rate of nine percent or 10 percent during 10
years, but we do envisage sustained growth at five, six or
seven percent. At those levels, (Gross Domestic) Product may
double in almost 10 years. Therefore, the size of the cake
Giordani based forecasts on Venezuelan economic expansion
over the last eight quarters. He ensured that official estimations
put GDP in 2005 up at "around nine percent. We have to wait
and see the figures the Central Bank of Venezuela is to disclose,
but it is the highest growth rate for a Latin American country
for the second consecutive year. This is a relief."
The outlook for 2006 is positive. "If this year was a year
of economic consolidation, next year will be a year of good
perspectives. Growth is to range from five to six percent.
Inflation may be below 15 percent at 12 percent. Oil prices
will be above USD 40," he said, adding that international
reserves currently amount to some USD 29 billion.
Regarding inflation, Giordani explained: "If inflation rate
in December this year is lower than 1.6 percent recorded in
the same period last year, yearly inflation in 2005 will be
below 15 percent, which is our target. Let us see the figures
the Central Bank is to announce."
The man in charge of economic planning in Venezuela conceded
that sustained high inflation rates are attributable to increased
food prices and transportation fares.
He added, however, that Mercal -a government-run network
of low-price food retailers- has helped offset such an impact.
"Mercal is doing great efforts in this particular area. Mercal
has extended its scope. It supplies food not only at controlled
prices, but also below regulated prices. This allows us to
stop inflation. Mercal is growing up, thus letting us to prevent
prices from continuing to soar, which is our major concern."
One of the major structural problems facing Venezuelan economy
is meager private investment. "It has been decreasing over
the last 20 years or more. Venezuela has been decapitalized,
and now we require capitalization. The public sector is not
the only one to undertake this effort."
Public investment in 2006 is expected to amount to some USD
20 billion from non-oil funds. Together with state-run oil
holding Pdvsa scheduled investments, public investment next
year "is not to reach seven, eight or nine percent of GDP.
We need private investment, both domestic and foreign, in
a way to stop this decline we have experienced over the last
"If some firms do not invest, others will come to invest,"
Giordani said confidently. "If Venezuelan entrepreneurs do
not take action, they are going to lag behind. This is a message
for people in (major business, industry and trade association)
Fedecámaras. During meetings with President Hugo Chávez,
I told them: 'If yearly public investment is around USD 10
billion, the private sector has an obligation to invest at
least other USD 10 billion, or rather USD 20 billion a year,
in order to have a 1:1 ratio, not a 2:1 ratio."
"Of course, some of them (domestic private investors) have
started assessing business opportunities and have begun to
invest. If they are real entrepreneurs, they are ready to
take risks, right?" said the minister.
Translated by Maryflor