Venezuela's indebtedness estimated at USD 27.1 billion in 2013

Venezuelan Minister of Planning and Finance Jorge Giordani submitted on Tuesday to the National Assembly both the draft Indebtedness Law and the draft Budget Law for fiscal year 2013, both of which aim at "furthering the transition towards the socialist productive model."

Baseline expenditure next year was estimated at USD 92.1 billion, while indebtedness was calculated at USD 27.1 billion.

Such estimates are based on "prudent and rational" macroeconomic premises, according to Giordani. The oil average price was calculated at USD 55 per barrel; inflation at 14-16%; and economic growth at 6% of GDP. The foreign exchange rate will remain unchanged at VEB 4.30 per US dollar, the minister explained.

Income

The estimated USD 92.1 in public spending will be met through ordinary income of USD 69.7 billion and special credits amounting to USD 22.1 billion.

The minister informed that ordinary income would include USD 19.32 billion from the oil sector. Thus, the baseline contribution of state-run oil company Pdvsa will climb by 22.5% in 2013 compared to 2012.

Non-oil revenues were estimated at USD 50.6 billion, with USD 47.76 billion in taxes to be collected by the National Customs and Tax Administration Service (Seniat). Hence, Seniat contributions next year will jump 32% with respect to 2012.

As much as USD 21.9 billion out of the total projected debt (USD 27.1) will be allocated to meet ordinary expenses.

Giordani stressed that a great deal of the resources will be used for social investment and noted that the funds provided for this area will amount to USD 43.6 billion.

The head of the finance ministry also commented that next year special attention would be paid to social programs, commonly known as missions, and labor liabilities, yet he did not mention how much money from the budget will be allocated for payment of social benefits to the public sector.

Translated by Jhean Cabrera