Venezuelan gov't expenditures hike 15% over 2011
Public expenses by October amounted to USD 71.8 billion
Finance Ministry's data reveals that some USD 71.8 billion was spent from January-October, 2012, compared to USD 51.6 billion in the same period in 2011.
Therefore, in practice expenditure has jumped sharply. After inflation, it soared 15% with respect to 2011.
Although expenditure slowed down in October, it has been very high throughout the year. That explains continuous growth.
During fiscal year 2012, the Government has been constrained to expend more due to its large bureaucracy and allocations to welfare programs commonly known as missions.
The Finance Ministry noted that one third of the expenses made over the last 10 months focused on labor. Nearly USD 18.6 billion was provided to pay salaries in the public sector.
FY2012 budget's provisions for salaries were insufficient. Therefore, additional credits have been approved to meet labor liabilities.
Growing labor liabilities have been the result of heavy bureaucracy in the public sector for eight years and, particularly, since 2007, when the Government took control of different sectors, adding more workers to its payroll. Furthermore, the encouragement of an economic model with new forms of production, whose payments to workers are subject to the Executive Office's expenditure, has exerted a great impact on liabilities.
Heavy expenditure is also attributable to higher costs for the so-called missions.
In 2012, new social programs were incorporated. FY2012 funds were also insufficient to go ahead with the missions. So authorities have had no other choice but to obtain additional sources to meet such obligations.
The Finance Ministry informed that by October this year the Government had spent USD 71.8 billion, that is to say, 73% of FY 2012 budget.
Translated by Jhean Cabrera
A group of some 60 Venezuelan economists from across the country and from different generations and backgrounds, has met regularly in the past couple of years and now has brought forth a document explaining the reasons of the current emergency and outlining specific proposals on how to address the serious economic crisis the country has plunged into over the last three years.