|
Chávez
wins recall vote by solid majority
The
recall referendum over the Chávez Presidency was decided in favour of the
president on 15 August.
According to the final results from the National Electoral Council
(CNE), the president was re-legitimated for his post by 59.1% of voters.
Turnout was very high with 69.9% voter participation.
The results confirmed pre-election voter survey trends, which
indicated that the ‘No’ vote had clearly gained ground since February
of this year.
The results of the referendum were audited separately by election
observers from the Carter Center and the Organization of American States,
which both confirmed the results.
President Chávez will now carry out his term until the end of his
mandate following the December 2006 presidential elections.
A resolution to political division, however, remains far from being
reality.
Despite objective audits of the results, the opposition has charged
that the referendum was plagued by “massive fraud” and promises to
challenge the outcome in the courts.
For the time being, however, the importance of the opposition on
the political stage is likely to diminish.
Opposition parties are likely to regroup and organize for the
upcoming 31 October nationwide elections for governors and mayors.
Any halt to the political stalemate is likely to be temporary.
Nevertheless, the strong vote in favour of President Chávez’s
administration is likely to ensure that a significant change to the
current unorthodox, populist economic policy is unlikely to materialize.
The resulting continuation of lax fiscal policy is likely to
sustain the high vulnerability of the economy to a sudden deterioration in
the oil price.
Economic
activity robust but slows
In
the second quarter, gross domestic product (GDP) grew 13.6% over the same
quarter last year, which exceeded market expectations.
In the first quarter, GDP expanded by 34.8% on the back of a
devastating recession in the same period the year before, when a prolonged
nationwide strike had wiped a full month from the accounting books.
However, by the second quarter last year, the economy was on the
mend.
Unlike the first quarter of this year, when private and public
output alike experienced a strong growth push, the second quarter
expansion was driven by private sector activity (+ 16.1% year-on-year).
The public sector, in contrast, grew at a more moderate 5.9% pace
over the same quarter last year.
With the second quarter release, the Central Bank also published
revised numbers for GDP last year, according to which economic activity
dropped a lesser 7.6%, well below the originally reported 9.4%.
Oil
sector activity slows despite robust prices
Activity
in the oil sector experienced a strong slowdown in the second quarter, as
growth moderated to just 3.5% over the same quarter last year, which was
just a fraction of the 70.1% expansion observed the prior quarter.
The slowdown came as a surprise, as the price for the Venezuelan
basket of crude oils averaged US$ 30.09 per barrel in the second quarter,
34.7% above the level recorded in the same quarter last year.
Non-oil
sector bolstered by financial services, construction and commerce drive
growth
Robust
growth in the financial sector, construction and commerce drove up
economic activity in the second quarter.
Growth in the financial services industry continued to be very
strong, as activity rose 32.4% over the second quarter last year.
Similarly, construction output grew 28.2%, while activity in
commerce was up 27.9% for the same period.
With the exception of electricity and water as well as mining,
where activity was up 3.5% and 8.0% respectively, all other sectors
experienced double digit expansions. |
