national deficit, economy of Venezuela, industrial economy, resource extraction, national budget
The economy of Venezuela is built upon the nationís rich petroleum and mineral resources. While resource extraction has assisted in developing an industrial economy, the nation is vulnerable to fluctuations in world markets. High petroleum prices in the early 1980s gave the country the highest annual per capita income in South America, but in the early 1990s a weak global oil market, coupled with political instability and a crisis in the banking system, produced a series of economic shocks for the country. The gross domestic product (GDP), after rising throughout the 1980s, began to fall in the 1990s as the inflation rate rose. The government responded by reducing spending, improving tax collections, and accelerating privatization of state-owned firms, all intended to reduce inflation and the national deficit. The national budget in 1999 included revenues of $17.7 billion and expenditures of $20.1 billion. The GDP in 2000 was $120.5 billion.
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