Venezuela’s Economy Falls 9.4% for Quarter

Venezuela’s economy shrank 9.4% during the three months ended in June, led by a decline in construction, as the country’s worst recession on record entered a sixth quarter. The drop followed a 27.6% contraction in the first quarter, the central bank said in a statement.

Restrictions on dollar purchases set by the government in January amid a two-month nationwide strike have prevented businesses from importing parts, reducing production. The government implemented the limits because the strike, which was aimed at forcing President Hugo Chavez from office, slashed production of oil, the country’s main source of dollars.

Venezuela’s construction industry shrank 50.7% in the second quarter, the central bank reported. The retail industry contracted 17.4%, while manufacturing declined 14.3%.

Venezuela’s recession is the worst since the central bank began keeping records in the 1950s.

The oil industry, which accounts for about a third of the $80-billion economy, contracted 2.9%, the central bank said.

Venezuela is the world’s fifth-largest supplier of oil. Before the strike, the country was producing about 3.2 million barrels a day. The government says that production has been restored to pre-strike levels. Former employees of the state oil company claim output is closer to 2.6 million barrels a day.

From Bloomberg News