How not to run the finances of a country.

August 3, 2003

According to a report in today’ El Universal, in the first quarter of this year the Venezuelan Government spent 5.86 trillion Bs. which is higher than the 3.92 trillion of the similar quarter a year earlier. Now, if the economny shrank by 29% in this quarter, how could the Government do this? Easy, for each Bs. 100 that the Government spent, 27 came from proceed from placing internal debt. Moreover, according to an Economist from Catholic University, there was a decrease of funds spent in compulsory budget items and an increase in discretional ones. The economist concludes: ” If this dynamic continues, the problem of financing the deficit will only get worse, with negative consequences for inflation and salaries”. God help us!

This entry was posted on August 3, 2003 at 3:02 pm and is filed under Venezuela.

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