Macroeconomic Forecast Economic Malaise Set To Continue

BMI View:The dismal third quarter GDP growth figure (-4.5%) was a clear reminder of the poor state of the economy, and confirms our long-held expectations that Venezuela would lag the rest of the region in terms of escaping the recession. Although the weak number is likely to galvanise countercyclical spending - especially in view of 2010's legislative elections - we expect the wide asymmetries in the economy, and difficulties in ramping up oil production, to continue to drag on growth and therefore maintain our out-of-consensus forecast for a 4.2% contraction in real GDP in 2010.

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