Tuesday, July 01, 2008

The great pig out continues 

I hope that all the talk of inflation and some mediocre economic numbers hasn't given anyone the false notion that Venezuelans are all of the suddent getting poorer.

They aren't.

In fact, consumption is still increasing quite rapidly. According to one economic analyst consumption is expected to grow 12% this year. While lower than the 20% growth of last year it is still fairly high. The analyst expects that growth with accelerat in the second half of the year as the government has lots of money to spend (with oil at $143 a barrel "lots" is probably an understatment) and given the importance they attach to the local elections they probably will spend it.

Along these same lines we learn that sales in shopping centers are up another 15% this year. Again this squares perfectly with what you will see if you ever go to Venezuela - shopping centers are definitely their major growth industry.

Back in the 1970s some Middle Eastern countries thought they'd become the worlds banking center.

Now maybe Venezuela thinks it will become the worlds shopping center and people will come from around the world just to shop in all their really nice malls. And I do say, some of their new malls are really nice. Then again considering how expensive everthing is in Venezuela I am not so sure that will work out.

Maybe they should try to think of something else... like actually learning how to make some of the stuff they sell in those malls. That is, if they can tear themselves away from the malls long enough to do that.

Sadly, when your GNP is increasing at only 4.8% and consumption is increasing at 15% something else has to give, and that "something else" is likely investment in new industry.


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