Venezuela » Introduction

Basic Economic Facts

GDP composition by Sector

Venezuela remains highly dependent on oil revenues, which account for roughly 90% of export earnings, more than 50% of the federal budget revenues, and around 30% of GDP.

Tax collection-Venezuela's primary source of non-oil revenue-is expected to surpass $23 billion in 2006, exceeding the yearend collection goal by more than 20%. A nationwide strike between December 2002 and February 2003 had far-reaching economic consequences - real GDP declined by around 9% in 2002 and 8% in 2003 but economic output since then has recovered strongly. Fueled by higher oil prices, record government spending helped to boost GDP growth in 2004 and 2005 to approximately 18% and 11%, respectively.

Economic growth in 2006 reached around 9%. This spending, combined with recent minimum wage hikes and improved access to domestic credit, has fueled a consumption boom, car sales in 2006 increased by around 70% but has come at the cost of higher inflation. Despite government attempts to withdraw liquidity from the economy, Venezuela's money supply set a record in June 2006, approximately 70% higher than the previous year. Imports have also jumped significantly.