Venezuela economy grew 5% in 2023, will reach 8% this year-Maduro

By Mayela Armas

CARACAS (Reuters) – Venezuela’s economy grew more than 5% in 2023 and growth will reach 8% this year, President Nicolas Maduro said on Monday during his annual address to the government-allied legislature.

Venezuela’s economy has suffered a prolonged meltdown marked by triple-digit inflation and a mass exodus of millions of migrants seeking better prospects elsewhere, though its inflation rate is no longer Latin America’s steepest since Argentina’s sped past 200%.

Inflation reached just under 190% last year, according to the central bank, marking an easing from 234% the year before.

“In 2024 we will continue the policy of stoking national production, of recovering national income, of recovering income for workers,” Maduro told lawmakers. “For this year we project a gross domestic product growth of around 8%.”

Growth was 15% in 2022, Maduro has said.

Inflation will be two digits this year, Maduro said.

State oil company PDVSA contributed $6.23 billion to the country’s coffers last year, Maduro added.

The figure, which Maduro said funded salaries, healthcare, education and housing, corresponded to what the company handed over to the government, not to total earnings.

According to a document seen by Reuters late last year, the government foresees a 27% increase in its income from PDVSA this year, after a relaxation in U.S. sanctions and despite stagnant production.

Sanctions relief, which is set to last until April, has increased prices for Venezuelan crude and analysts expect the income to lead to more social spending as the government tries to ensure support in a coming presidential election.

Oil income has previously been battered by low production due to deteriorated infrastructure and lack of investment.

Maduro’s administration estimates total spending in 2024 will be equivalent to $20.5 billion and income from oil exports and taxes paid by PDVSA would cover 58%, the document seen in December showed.

The U.S. eased sanctions in October after the government inked an elections deal with the opposition.

In December, United States President Joe Biden granted clemency to a Maduro ally in exchange for the release of 10 Americans and at least 24 opposition-linked Venezuelans.

A date for the election has not been set, but it is expected in the second half of the year.

(Reporting by Mayela Armas and Julia Symmes Cobb, additional reporting by Deisy Buitrago)