BCV’s Latest Stealth Report

While you weren't paying attention, BCV put out its QIV 2015 report. It's...everything you'd expect it to be.

While you were pouring milk on your cereal this morning thinking about the implications of Maduro’s speech yesterday, the Central Bank (BCV) published an economic data report “under the radar” with the remaining macro figures of 2015. This is a chavista classic: to publish sensitive data when the country is still digesting and discussing what just happened the day before – in this case, the “Paquetazo rojo”.

The Headline: inflation in the last quarter was 34.6%, and a total, historic, never-seen, record-high, yet “maquillada” 180.9% of inflation last year. We all know that real inflation levels are actually higher than that.

Nonetheless, this official inflation is highest in the world (for the third year in a row we’re  world champions in that division), and the highest in Venezuela’s entire history. Yet, the BCV still has the nerve to say that 4Q2015’s inflation is lower than 3Q2015’s (34.6% vs 38.9%) and that 10 out of 13 activities had a lower-than-average inflation – as if it was some sort of accomplishment.

As per GDP performance, the BCV reported a -5.7% contraction. Again, we all know better than to take that number at face value, but it’s what they said. Even this figure reflects the worsening of a deep, structural and worrying recession that started at in early 2014 – with oil prices above the USD 80 per barrel – and aggravated by low oil prices in 2015. Even the official BCV data screams that the real problem is el modelo.

But wait, there’s more! The private sector registered a -8.4% contraction, while the public sector grew +1.1%…this is the real “Guerra Económica” folks. Unless it makes sense to you that the private sector is “sepukkuing” itself just to destabilize Maduro.

The combined effect of 2014 and 2015 recession (-3.9% and -5.7% respectively) is much worse than what was registered in 2009 and 2010, after the global economic crisis (-3.2% and -1.5% respectively).

On Trade Balance matters the BCV reported a -18.7% decrease in total imports. This, and not any of the paja Maduro talked about yesterday, is where the government’s real adjustment strategy shows up.

Without the dollars to maintain their populist agenda while servicing debt payments, they prioritized debt payments in 2015, to the tune of USD 10.886 million, over food and medicines imports. The Results: crippling shortages of any basic product you can imagine.

In general Balance of Payments grounds, the current account showed a staggering deficit around USD 18.150 million due to the free fall in the oil market.

All-in, I think we can say that 2015 was the worst year in economic terms of Venezuela’s modern history. Bueno, not counting 2016.

El Legado de Chávez.

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