Venezuela’s economy entered a new recessionary cycle by showing contractions in the Monthly Index of Economic Activity for two consecutive quarters, the Venezuelan Observatory of Finance (OVF) reported.
According to the OVF, an independent entity that analyzes the behavior of prices in the absence of official figures, in the first quarter of 2023, economic activity had a fall of 7.6%, and in the second half of the same year, the contraction was 6.3%.
“The figure for the first quarter was revised with updated information, and after a fall in the indicator of 8.3%, it was reconsidered at -7.6%,” the OVF said in a press release.
These data lead the OVF to estimate that in the first half of 2023, economic activity contracted by 7% compared to the same period in 2022.
An economy is considered to be in recession when gross domestic product (GDP) falls for two consecutive quarters.
The OVF stressed that this fall in economic activity occurs in the context of an increase in oil production, which “could not compensate for the declines observed in factors that determine the behavior of domestic aggregate demand.”
“Real public expenditure, approximated by stocks in the National Treasury, real bank credit, trade sales in real terms, and consequently VAT collection, showed contractions in the quarter in reference,” OVF reported.
