[NYTr] AP Claims Venezuelan Public Spending Being Reduced
 
Date: Tue, 10 Jul 2007 22:53:35 -0500 (CDT)


Via NY Transfer News Collective  *  All the News that Doesn't Fit
 
[Contradicting the LA Times piece published in the Miami Herald, this
AP piece claims Venezuela is curbing public spending. -NY Transfer]

AP via Yahoo - July 6, 2007
http://biz.yahoo.com/ap/070706/venezuela_economy.html

Venezuela Slows Down Public Spending

By Raul Gallegos

CARACAS -- Venezuela has begun to slow public spending and plans to
issue some US$2.8 billion (euro2 billion) in bonds and treasury notes
by year's end to counter inflation, the finance minister said.

Rodrigo Cabezas said the idea is to gradually moderate spending while
monitoring the economy's response.

"We're talking about a policy of fiscal responsibility," he told Dow
Jones Newswires on Friday.

Inflation reached 17 percent last year, a major headache for President
Hugo Chavez. Cabezas said the government's goal of 12 percent inflation
this year "will be very difficult to reach," and that 14 percent would
be more sustainable and manageable.

Boosted by high oil prices, Venezuela's economy should grow at least 8
percent this year, Cabezas predicted. He also said that despite the
spending slowdown, Venezuela will likely end the year with a fiscal
deficit of 2 percent of gross domestic product.

The administration also plans to sell US$2.8 billion (euro2 billion) in
government debt, including US$837.2 million (euro615.8 million) in
short-term treasury notes, and will buy US$100 million (euro73.5
million) in Bolivian treasury notes in the coming months, Cabezas said.

As for Venezuela's currency, he said there are no plans to devalue the
bolivar in the next four to five years.

Venezuela has had a fixed exchange rate since 2003, when Chavez imposed
currency and price controls in an attempt to stabilize the economy.

Since then, the Central Bank has devalued the bolivar twice. The rate
has been fixed since early 2005 at 2,150 bolivars to one U.S. dollar,
but the black market rate has edged above 4,000 bolivars to the dollar
in recent weeks.

       
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