Caracas lifts veil on economic data, Oslo talks end

Venezuela's central bank published macroeconomic data for the first time in over three years, affirming that the oil-based economy shrank by 47.1pc in real inflation-adjusted terms from third quarter 2015 through third quarter 2018.

Oil GDP alone contracted over 44.2pc during the three-year period, the government-controlled bank said.

The data release followed 14 consecutive quarters without information. The bank did not explain why the information was abruptly released now.

The release coincided with sensitive negotiations between the Venezuelan government and the political opposition with the mediation of the Norwegian government in Oslo. The talks that started on 27 May ended today with no agreement. It was not immediately clear if the two sides agreed to meet again.

The data blackout was imposed in October 2015 by the bank's former president, Nelson Merentes, who claimed at the time that suspending publication of official quarterly macroeconomic numbers was necessary to counteract an alleged US-led "economic war" against Venezuela.

The updated figures issued by the bank yesterday, combined with previously released official data, show that Venezuela's oil export revenue tumbled from $66.5bn in 2013 to $29.8bn in 2018.The plunge was attributed to a combination of weaker oil prices and falling crude production that the bank blamed mainly on US sanctions. The newly released data did not include oil export revenue for the first four months of 2019.

Independent Venezuelan economist Tamara Herrera and opposition-controlled National Assembly deputy Jose Guerra said the government is under pressure from multilateral entities led by the International Monetary Fund (IMF) and World Bank that would refuse to engage in any economic assistance and new loan discussions until Caracas refreshed its official data.

Officials representing three opposition parties, including self-declared interim president Juan Guaido's Popular Will (VP), tell Argus that Maduro may have ordered the bank to publish the macroeconomic numbers as a show of goodwill during the Oslo talks.

Two opposition leaders critical of the talks said it is also possible that disgruntled bank officials decided to publish the data independently.

The bank's updated quarterly data shows that Venezuela's economy as of the end of the third quarter 2018 had contracted nearly 48pc in real inflation-adjusted terms since Maduro was elected president in April 2013.

Venezuela's inflation-adjusted GDP contracted 22.4pc in full-year 2018, with first quarter 2019 GDP shrinkage estimated at over 19pc compared with a first quarter 2018 decline of 15.7pc, the bank reported.

Based on the official numbers, Venezuela's economy at the end of March 2019 had regressed to levels last recorded in the early 1940s.

Consumer price index data shows that official inflation of 180.9pc in 2015 climbed to 274.4pc in 2016, then in 2017 to 862.6pc and in 2018 to over 130,000pc.

The central bank reported monthly inflation during the first four months of 2019 at 196.6pc in January followed by 114.4pc in February, 34.8pc in March and 33.8pc in April, suggesting that inflationary pressures have eased significantly since the start of this year.

Two economists who work with political opposition acknowledged that inflationary pressure has eased in recent months in response to weaker consumer demand, fueled partly by the flight of some 5mn Venezuelans since 2013, coupled with the Venezuelan economy's de facto dollarization.

Venezuela's non-oil GDP shrank over 46.4pc from third quarter 2015 through the end of third quarter 2018, the bank said. The worst-performing economic sectors were construction (-89.3pc), commerce and services (-74pc), banking and insurance (-73.6pc) and manufacturing (-68.8pc).

More international talks next week

Ministerial delegations from the EU-led International Contact Group (ICG) and the Lima Group will meet on 3 June in New York to discuss the crisis in Venezuela. The ICG delegation will be headed by European Commission foreign affairs high representative and vice president Federica Mogherini and include the foreign ministers of Portugal and Uruguay. The Lima Group delegation will include the foreign ministers of Canada, Chile and Peru.

Both groups are seeking a seeking a peaceful resolution of the standoff between Guaido and Maduro.

The US government, Juan Guaido┬┤s leading backer, appears skeptical of the Oslo talks, which Venezuelan critics fear could be exploited by Maduro to remain in power. "We believe the only thing to negotiate with Nicolas Maduro is the conditions of his departure," the State Department said on the eve of the talks on 25 May. "We hope the talks in Oslo will focus on that objective, and if they do, we hope progress will be possible."