Daring to Break the Silence

Secrecy has been a tacit policy of chavismo for years. Now, the National Assembly might have found a way to, maybe not break it, but at least disrupt it.

Venezuela’s GDP Gross Domestic Product has been an official mystery since December 2015. Requests for official data are ignored or blocked by the Supreme Tribunal, and though the IMF executive board showed Venezuela a Yellow Card on Transparency, we’re not quite sure when we’ll be seeing updated data on the BCV and INE websites.

Well, guess what? Waiting for the GDP data might be a thing of the past.

The Finance Committee of the National Assembly just surprised us with an unprecedented initiative: they’ll now calculate both the “Consumer Price Index of the National Assembly” and the “Monthly Economic Activity Indicator of the National Assembly”.

This is not a GDP indicator per se, but a “coincident indicator” of the economic cycle, providing hints on the behavior of GDP.

The idea is to create a proxy barometer from the publicly available data: the number of active oil rigs (published by Baker-Hughes), PDVSA’s oil production volume (published by OPEC), vehicle sales (published by CAVENEZ), deposits in public institutions (according to the BCV balance sheet), the total credit portfolio (published by SUDEBAN), deposits from the public (published by SUDEBAN), collection of value added tax (IVA, published by SENIAT), and many other charts.

There’s some precedent for this approach; the Central Bank measures a Monthly Economic Activity Indicator for 75% of the activities that compose the GDP. It’s just that surprise, surprise! it doesn’t publish it.

Here are the main results for 2017:

Venezuela has been in recession for 15 quarters straight. Economic activity shrank by 12% in the first nine months of 2017, and has contracted 24.5% between 2012 and september 2017. In per capita terms, it’s even worse, since we keep having babies.

Indicador de Actividad Económica de la Asamblea Nacional (IAEMAN) by Caracas Chronicles on Scribd

This data series has drawbacks, starting with the fact that it has to be estimated using available data that might already be adulterated. It’s not a proper replacement for what should be; the BCV and INE should do their damn jobs and publish the statistics they compile, like the Constitution orders them to. This is just a resuelve.

But in the face of official silence, work-arounds like this become the rule and not the exception. Get ready for more.