Poverty and Unemployment Down significantly in Venezuela in 2005

INE director Elias Eljuri made the announcement yesterday, saying that Venezuela’s poverty rate is expected to drop to 35% by the end of the year, down from 47% for 2004. during the first half of 2005 poverty was calculated to be at 38.5%. Also, critical poverty, the level at which people cannot afford to cover their basic needs, dropped to 10.1% in the first half of 2005, down from 18% the previous year.

According to Eljuri, this means that poverty has now dropped to a level below what it was before Chavez came into office, in 1999, when the INE registered the poverty rate to be at 42%.

Unemployment also dropped significantly, reported the INE, from 14.5% in September 2004, to 11.5% in September 2005.

The drop in the unemployment and in the poverty rate are linked to the tremendous growth the Venezuelan economy has been experiencing for the past seven quarters. It expanded by 11.1% in the second quarter of 2005 and by 7.5% in the first quarter, relative to the same quarters a year earlier. Prior to that, in 2004, the economy grew by an unprecedented 17%, relative to 2003.

This seven-quarter period of uninterrupted growth follows a period of two years of economic decline, which most economists attribute to the political and economic chaos caused by the April 2002 coup attempt and the late 2002 to early 2003 shutdown of the country’s all-important oil industry. The economy declined by 8.9% in 2002 and by 7.7% in 2003, relative to the respective previous years.