Economy will not grow in 1999

CARACAS, Venezuela (AP) — The Venezuelan economy is not expected to grow in 1999, and inflation should reach 20 percent, Finance Minister Maritza Izaguirre said Feb. 5.

“This year there will be no growth, especially in the non-oil sector,” she said while leaving the first economic Cabinet meeting of newly inaugurated President Hugo Chavez.

The current recession, caused by low international oil prices, will likely give rise to higher unemployment but lower inflation. Chavez, who took office in early February, begins his mandate with a budget deficit expected to reach $9 billion this year.

Inflation in 1998 was 30 percent, but is expected to fall to 20 percent this year because of the recession, Izaguirre said.

Venezuela, the leading oil exporter to the United States, has been hard hit by a 12-year low in international oil prices. Nearly three-quarters of export earnings and over half the national budget come from oil.

The new planning minister, Jorge Giordani, said the government will try to combat the recession through stimulating foreign investment.

Last year, the economy shrunk by 0.7 percent. Unemployment is about 11 percent, and nearly half the population is working in the so-called “informal” economy, selling their wares on street corners, flea markets and sidewalks.