CARACAS, Dec 2 (Reuters) - Venezuela’s economy will contract again next year even if oil prices stem their steep fall and recent fiscal reforms give the economy some steam, according to the United Nations’ body for Latin American and the Caribbean.
The OPEC country’s economy is seen contracting 3 percent this year and 1 percent next year, the Chile-based Economic Commission for Latin American and the Caribbean said in a report on Tuesday.
“The calculation of minus 1 percent is based on reforms having a positive effect and oil prices not falling further,” Daniel Titelman, director of the Economic Development Division, told Reuters in an interview.
“If prices don’t recover it will be bad news,” he added.
Indeed, the tumble in Brent crude - down nearly 40 percent since June - comes at a tricky time for Venezuela, which is struggling to cover major debt payments, arrears with private companies, and social programs.
Slowing investment and private consumption, as well as the region’s highest inflation rate, have also stung the economy, Titelman said.
Venezuela is the only economy in Latin America and the Caribbean predicted to contract next year, with growth in the commodities-dependent region seen at 2.2 percent in 2015.
To soften the blow of lower oil prices, Venezuela, which receives 96 percent of its foreign currency revenues from oil, must improve production, diversify its exports and ensure strong social programs, Titelman stressed.
Venezuela’s central bank has not published data on gross domestic product for 2014 and has not published inflation data since August’s figures.
Critics of President Nicolas Maduro say a politicized central bank is hiding negative data to avoid criticism.
Maduro blames the economic crisis on a “war” waged against him by a right-wing elite intent on toppling the socialist government.
Economists largely point to restrictive currency controls that have stymied imports and operations, a nebulous legal framework that has discouraged fresh investments, and falling domestic production.
Titelman said the ECLAC was “not worried” by the data delays, though he said the commission’s calculations were as a result based on partial information.
“We think they are going to publish the numbers,” he said. (Writing by Alexandra Ulmer; Editing by Leslie Adler)