Central government spending rises 41.7% in January

The Venezuelan government is boosting spending ahead of presidential elections. In fact, disbursements from the National Treasury soared in the first month of the year.

Government's outlays totaled USD 6.67 billion in January, versus USD 3.69 billion in January 2010, according to data from the Ministry of Finance.

The nominal increase in spending was 80%, and economic research firm Ecoanalítica, estimates real growth (which includes inflation rate) at 41.7%.

Spending in the first quarter of the year tends to be restricted. In general, the government increases its expenditure towards the second quarter. However, this trend has changed in 2011.

National Treasury's disbursements in the first months of 2011 exceeded spending in the first quarter of 2010. According to government's data, this trend will continue in the early months of 2012.

"The spending recorded in January is like any disbursements made in April (a period of high spending)," explained José Luis Saboin, a senior economist at Ecoanalítica. If this behavior persists, he added, "expenditures in October will be similar to spending generally reported in December."

The Executive Office mentioned in the foreword of the FY2012 Budget Law that in order to promote "economic growth this year, there will be a nominal spending expansion that will speed up liquidity."

Among the spending guidelines set by the government, President Hugo Chávez's administration resolved to allocate more funds to state-run enterprises and spend more in social programs, particularly new "missions."

According to Treasury data, one third of the outlays in January went to payment of salaries. In fact, the government earmarked USD 2.09 billion in January for that matter.

In 2011, the government planned to spend USD 47.48 billion but it finally executed USD 75.35 billion, as a result of additional credits requested during the fiscal year.

marmas@eluniversal.com

Translated by Gerardo Cárdenas