Stagflation in Venezuela...

Discussion in 'Economics' started by Moc Yeah, May 27, 2009.

  1. are we heading this way? Maybe when Pres. Obama finishes his Hugo book.

    Seventy-five percent of private companies record plunging sales
    At least 60 state-run businesses are recording losses

    Transition to socialism, together with the world financial crisis, is undermining the income of Venezuelan businesspersons. As a matter of fact, 75-80 percent of private companies have recorded falling sales so far this year.

    The numbers were provided by the Network for Defense of Labor, Ownership and Constitution. The think tank held a forum on Monday on social property and freedom of expression.

    In the opinion of Vicente Brito, the chair of the organization, shedding income is making an operational and financial impact. "Businesses are facing troubles even to repay loans. Increasing arrears give evidence on it," he said.

    Agricultural and related industries, trade and tourism are top in the list of the most stricken sectors.

    Brito fears that trade will move back by 10 percent in the first half of 2009, compared with last year. Tourism will drop by 20 percent.

    For his part, Economist José Guerra thinks that the Executive Office should use a portion of its resources to capitalize the state-run companies, particularly recently nationalized businesses. He reported, for instance, that power supplier Electricidad de Caracas is facing losses.

    Based on the results of the first quarter of 2009, the expert reasserted his assumption that stagflation arrived in Venezuela, together with economic slowdown and gradually rising prices.