Venezuela’s president says economy shrank 3 percent in 2014

By Eyanir Chinea

CARACAS (Reuters) – Recession-hit Venezuela’s Gross Domestic Product (GDP) shrank 3 percent in 2014, President Nicolas Maduro said on Thursday, blaming the worst economic performance in Latin America on political opponents.

“With the economic war, they made the economy detract 3 percent last year,” he said on state TV.

Venezuela’s socialist government says domestic political foes and opposition-aligned businessmen have been deliberately sabotaging the OPEC nation’s economy via hoarding, price-gouging, smuggling and other means.

But critics say 16 years of hardline socialist policies, including price and currency controls plus hostility toward the private sector, are behind Venezuela’s economic woes.

The situation was exacerbated by last year’s plunge in prices for oil, which accounts for 96 percent of Venezuela’s hard-currency revenues.

Private economists are predicting Venezuela’s economy will shrink again this year, perhaps worse than in 2014.

The oil-dependent economy grew 1.3 percent in 2013.

Inflation last year was 68 percent, and some economists are predicting three-digit price rises this year.

The government has not published data for the first four months, to the anger of the opposition.

Despite the poor GDP data, Maduro said, Venezuela had managed to lower unemployment to record levels.

“Normally, for each percentage point of economic detraction, unemployment goes up one percent at least,” he said. “It’s a global, mathematical model. Last year, at the end of December, unemployment was 5.5 percent, a historic record in Venezuela.”

Opposition politicians question the government’s unemployment figures, saying they are inflated by informal and temporary workers.

(Writing by Andrew Cawthorne; Editing by Lisa Shumaker)