The economic landscape of Venezuela in 2023 displays distinctive features compared to previous years.

Recent periods have been predominantly marked by an economic blockade against the Venezuelan State, impacting a significant portion of the national economy.

Despite the challenges posed by illegal unilateral coercive measures, the year 2023 revealed both positive and negative aspects of the Venezuelan economy, highlighting the Bolivarian Government's economic victories while acknowledging ongoing challenges to be overcome.

GROWTH OF THE GROSS DOMESTIC PRODUCT

In a presentation to the National Parliament on the annual Budget Plan, Executive Vice President Delcy Rodríguez announced that the economy has experienced "nine quarters of economic growth." Detailed figures on Gross Domestic Product (GDP) were not disclosed.

The Central Bank of Venezuela (BCV) also reported a return to positive territory since the last quarter of 2021, marking the end of a harsh and prolonged recession. Growth in economic activities will have continued for 10 quarters by the end of 2023.

Estimates from the Economic Commission for Latin America and the Caribbean (ECLAC) suggest a 12% growth in Venezuela's economic activity in 2022, the fastest in Latin America. In May, President Nicolás Maduro Moros had projected a minimum GDP growth of 5%. Despite growth in 2023, it seems to have slowed compared to 2022, given the ongoing blockade affecting key economic activities throughout the year.

GROWTH OF OIL ACTIVITY

In 2023, despite the context of a genocidal and criminal blockade, state-owned Petróleos de Venezuela, S.A. (PDVSA) stabilized crude oil production, increasing from 716 thousand barrels per day at the end of 2022 to 801 thousand barrels per day by the end of November 2023, according to data from the Organization of Oil Exporters (OPEC).

This represents a global increase of 10.7% in crude oil production during 2023. Production levels exhibited a more stable trend compared to the volatility seen throughout 2021 and 2022.

Since October, the US government issued licenses indicating a limited and partial relaxation of coercive measures against PDVSA, providing a new boost to activity and marking Venezuela's formal return to the international oil market.

According to Vice President Rodríguez's speech before the National Assembly, the budget will increase by 39% for 2024 compared to 2023. Financial media reports suggest the Bolivarian Government anticipates a 27% increase in income contributed by PDVSA in the coming year, emphasizing the direct link between oil production, barrel value, and the state budget.

As a distinctive element of the recovery in crude oil production and a perspective for 2024, the national government estimates that total spending next year will be equivalent to 20.5 billion dollars. This budget will be financed 38% by ordinary income, suggesting that the oil sector, in the process of recovery, will contribute significantly to the new budget.

A DECREASE IN INFLATION

In 2023, Venezuela continued to smash inflation levels. Although still high compared to other countries, it is crucial to consider the context.

In 2018, amid intensified economic blockade measures, Venezuela witnessed hyperinflation exceeding 130,000% from January to December.

As of November 2023, the latest data from the BCV indicates an accumulated inflation (January-November) of 182.9%. The BCV highlights that November inflation is the lowest observed for the month since 2012.

The BCV indicated comparatively that November inflation was the lowest for that month, compared to recent years. (Photo: BCV)

The third quarter of 2023 marked the least inflationary period since 2014, with an accumulated variation of 22.3%, compared to 285.1% in the same quarter of 2018. In 2022, accumulated inflation (January-December) was 234.08%, and it is likely that Venezuela will not reach 200 points by the end of the year.

EFFECTIVE STABILIZATION OF THE EXCHANGE RATE

In 2023, the official reference exchange rate published by the BCV became the main marker of price systems in the Venezuelan economy. This marks a notable achievement compared to previous years, characterized by volatility and chaos in the monetary system.

As of December 26, 2023, the BCV reference exchange rate stood at 35.8 Bolívares/dollar, compared to 17.4 Bolívares/dollar on December 31, 2022. Exchange rates, both official and unofficial, maintained an upward trend during the year but exhibited more stable behavior compared to previous years.

October 2023 recorded the lowest monthly variation in the exchange rate since 2014, with only a 1.9% fluctuation. This stability is attributed to the exchange rate policy implemented by the Venezuelan government, involving the sale of foreign currency in the exchange system. According to Mercados y Acciones, the national executive placed 4.479 billion dollars in the exchange system from January to mid-December, relying on this approach to finance its activities and minimizing monetary issuance as a financialization mechanism for government activities and fiscal deficit.

The policies have been accompanied by significant liquidity restrictions, including limitations on credit cards and other instruments.

FULL FOOD SUPPLY

Once again in 2023, Venezuela achieved full food supply, overcoming the challenges of empty shelves and food lines caused by both internal and external economic warfare. These challenges were exploited by the international, hegemonic, corporate, Anglo-Zionist media and their regional puppets as alleged proof of failed socialism.

Vice President Delcy Rodríguez emphasized that the situation that arose in the country in 2015 has been overcome, with practically 97% of the supply of products and goods available in distribution networks. This positive aspect is attributed to the importance of the CLAPs.

PUBLIC SALARIES

Throughout 2023, the issue of the public payroll continued to be a significant challenge for the national economy, despite achieving some notable successes.

In the previous year, the minimum wage for the public sector was $30 per month in March, with no approved adjustments throughout the year despite several bonuses ranging from 15 to 30 dollars.

In 2023, the national government succeeded in increasing the nominal income of its public workers, with the minimum income per worker reaching the equivalent of $75 per month through a combination of bonuses and the basic salary. The government maintained a policy of standardizing bonus values according to the variation in the value of the dollar, enabling the preservation of the nominal value of salaries until the end of the year.

However, the public sector salary still faces significant weaknesses, primarily relying on limited state income due to the economic blockade. Adjustments have been possible only through bonuses, which do not address other demands such as vacations or profits, outlined in collective contracts in the public sector.

The government is committed to a more advantageous salary policy for the public sector, recognizing its impact on the consumption of large segments of the population and its contribution to boosting economic activities (GDP). However, budgetary constraints remain a reality.

The 2024 public budget of 20.5 billion dollars is significantly lower than the 2012 budget of approximately 138 billion dollars, illustrating the impact of the blockade on the Venezuelan economy and public salaries.

INCREASE IN TAX COLLECTION

Preliminary data released by Vice President Delcy Rodríguez indicate that 2023 witnessed an increase in tax collection, representing a significant advancement in the national economy. Tax collection increased by 28% compared to 2022, providing an opportunity to move beyond rentism and consolidate a culture of paying taxes and tributes.

This increase in tax collection is crucial for constituting a strong budget, supported by taxes on internal economic activities. It reduces the levels of vulnerability of the country and enhances the functioning of the State against external coercive measures. Throughout 2023, Venezuela continued to implement a rigorous fiscal policy, contributing to the partial recovery of the resource base for the Bolivarian Government to meet its obligations.

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