Tuesday, February 13, 2007
Debt down in Venezuela
Here is an interesting graph from Ultimas Noticias on Venezuela's public debt:
The bars on the bottom give Venezuela's total debt, both foriegn and domestic, in billions of dollars. The line with percentages on it indicates what percentage of GDP that debt is equivalent to. For example, in 1998 the country's debt was equal to 30% of GDP. Now, it has declined to 24.45% of GDP. That means Venezuela's debt is lower than at any time in recent history and lower than when Chavez came to office.
Also, this chart actually understates the good news. First, it leaves out the debt of the State oil company PDVSA which was about $7 billion when Chavez first came to office and has now been almost fully paid off. Secondly, much more of the current debt is domestic debt held in Bolivares. The significance of that is that given that much of the governments income is in dollars, from oil sales, once the Bolivar is devalued this debt will at the stroke of a pen be significantly reduced and easier for the government to pay down.
A booming economy, increased production, higher saving rates, more jobs, increased real incomes and consumption, and reduced debt. Given how well the economy is doing Chavez probably wishes there was another election right now so he could kick the oppositions tail yet again!
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The bars on the bottom give Venezuela's total debt, both foriegn and domestic, in billions of dollars. The line with percentages on it indicates what percentage of GDP that debt is equivalent to. For example, in 1998 the country's debt was equal to 30% of GDP. Now, it has declined to 24.45% of GDP. That means Venezuela's debt is lower than at any time in recent history and lower than when Chavez came to office.
Also, this chart actually understates the good news. First, it leaves out the debt of the State oil company PDVSA which was about $7 billion when Chavez first came to office and has now been almost fully paid off. Secondly, much more of the current debt is domestic debt held in Bolivares. The significance of that is that given that much of the governments income is in dollars, from oil sales, once the Bolivar is devalued this debt will at the stroke of a pen be significantly reduced and easier for the government to pay down.
A booming economy, increased production, higher saving rates, more jobs, increased real incomes and consumption, and reduced debt. Given how well the economy is doing Chavez probably wishes there was another election right now so he could kick the oppositions tail yet again!
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