The Central Bank has released its estimates of the economy's performance during first quarter 2004. As expected, the numbers are spectacular with the economy showing growth of 29.9% compared to the first quarter 2003 (oil, up 72.5%; non-oil activities, up 18.9%.)
But the numbers point to little more than a statistical anomaly. The fact is that the economy was severely depressed during last year's first quarter, due to the direct and indirect impacts of the national work stoppage (paro cívico nacional) - an exogenous shock that President Chavez has admitted he consciously sought to provoke. Last year, the economy shrank an incredible 27.9% in the first quarter (oil, down 47.0%; non-oil, down 19.2%.) Thus, it should come as no surprise that the economy was statistically "up" in this year's first quarter .
The first quarter of 2002 is a better basis for comparisons. The economy was running "normally" at that time. Yet, in the first quarter 2004 GDP was 6.3% below its Jan.-Mar. 2002 level (oil, down 8.5%; non-oil, 4.0%). The sectors doing best, as compared with two years ago, are Communications (up 10.4%), Government Services (up 9.5%) and Electricity & Water (up 6.3%). The largest declines were registered in Construction (down 52.7%), Commerce (down 11.1%) and Mining (down 9.4%).