Capital City: Caracas
	It is %T:%M %A in Caracas

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Economic trends

Economic prospects of Venezuela are highly dependent on international oil prices. The radical economic policy of the government, which is centred around strengthening the state-led development model, will lead to unattractive business environment especially for foreign investors. The economy recovered strongly and still record high GDP growth rate : 10.3% in 2006 and 8% in 2007. This economic revival is driven by a large increase in government expenditure based on rise in oil prices. However, with softening of oil prices, the fiscal stimulus will begin to vanish leading to slowdown in economy. The IMF forecasts a growth rate of 6% in 2008. Venezuela still has to face significant social and political tensions: unemployment rate touches nearly 20% of the active population and 60% of the population still lives below poverty line. The inflation remains at above 18%.

Main branches of industry

The agriculture contributes 4.5% to the GDP and employs 10% of the active population. The main agricultural products are wheat, corn, soybeans, cotton, meat, fish, and coffee. Venezuela has substantial natural resources. It is the 4th largest exporter and the 7th largest producer of oil in the world. Oil sector accounts for roughly 16% of GDP. The country also has 3% of the world's total gas reserves. The manufacturing sector contributes nearly 17% to the GDP, but remains handicapped by lack of private investments. The major manufacturing sectors are steel & aluminum, textiles & apparel, food-processing, cement, and automobile. The services sector contributes nearly 45% to the GDP.

International trade

Thanks to petroleum exports, Venezuela usually posts a trade surplus. The country's external trade is dominated by oil which contributes nearly 87% to export earnings. Venezuela is the third largest oil supplier to the USA. The share of foreign trade to country’s GDP is around 55%. The country's top three export partners are: the USA, Colombia and Mexico. The commodities mainly exported are mineral fuels & oils, iron & steel, aluminium, organic chemicals and vehicles. Its top three import partners are: the USA, Colombia and Brazil. The country mainly imports nuclear reactors & boilers, machinery, vehicles, electric & electronic equipment, iron & steel articles, and pharmaceutical products.