Recession in Venezuela

Venezuela entered a recession in 2014, with the economy shrinking in the first three quarters, the Central Bank said on Tuesday, blaming political opponents for the dismal figures.

In a statement, the bank said GDP contracted 4.8 percent in the first quarter, versus the same period of last year, then it fell a further 4.9 percent in the second quarter and shrank 2.3 percent in the third quarter.

The statement added that 12-month inflation, which is the highest in the Americas, reached 63.6 percent in November.

The central bank statement, confirming an economic contraction widely forecast by analysts, came just before President Nicolas Maduro was about to start a news conference in which he was expected to announce economic changes.

Venezuela's socialist government blames political opponents, who protested in the streets for four months earlier this year, for damaging the South American OPEC nation's economy. The protests resulted in violence that killed 43 people.

"These actions against public order blocked the correct distribution of basic goods to the population, as well as the normal development of production of goods and services," the bank statement said.

"This resulted in an inflationary spike and a fall in economic activity."

Opponents say Venezuela's economic crisis is a consequence of 15 years of socialist policies, begun by Maduro's predecessor Hugo Chavez, who ruled from 1999 to 2013 before his death from cancer.


Venezuela was colonized by Spain in 1522 amid resistance from indigenous peoples. In 1811, it became one of the first Spanish-American colonies to declare independence, which was not securely established until 1821, when Venezuela was a department of the federal republic of Gran Colombia. 

It gained full independence as a separate country in 1830. During the 19th century, Venezuela suffered political turmoil and autocracy, remaining dominated by regional caudillos (military strongmen) until the mid-20th century. 

Since 1958, the country has had a series of democratic governments. Economic shocks in the 1980s and 1990s led to several political crises, including the deadly Caracazo riots of 1989, two attempted coups in 1992, and the impeachment of President Carlos Andrés Pérez for embezzlement of public funds in 1993.