Fiscal Policy: Anything Goes

October 2006 | Market Strategy

Venezuela's nominal fiscal deficit came in at VEB2.9trn in Q206, the second largest quarterly deficit since the beginning of 2002. While spending increased by 74.6% y-o-y during H106 (up from 29.7% in H105), revenues only rose by 26.8% y-o-y (down from 91.0% y-o-y in 2005). Chart 1 illustrates that the country managed to accumulate considerable surpluses during the first three quarters of 2005.

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