CARACAS, Nov 22 (Reuters) - Oil-exporting Venezuela is in recession, its socialist President Hugo Chavez said on Saturday, adding that the capitalist system of measuring economic growth was established in the United States.
“When an economy shrinks instead of grows, according to the norms established by international capitalism, then it enters into recession,” he said during a five-hour speech to inaugurate a party congress.
“GDP fell in the third quarter, and so we entered a recession, according to the patterns elaborated in the United States,” he said.
Venezuela’s economy contracted an unexpected 4.5 percent in the third quarter, a second consecutive three-month contraction that most economists’ define as a recession.
Until now, the government avoided using the word.
Chavez says the normal method of measuring a country’s gross domestic product does not sufficiently weigh social services and publicly owned enterprises. He has called for the measurement to be revised in Venezuela.
Chavez has nationalized many of Venezuela’s major industries, along with some food production, telecommunications and electricity.
Many in the private sector say his policies have a chilling effect on manufacturing, which fell by nine percent in the quarter.
Venezuela enjoyed a five-year boom of fast growth fed by soaring oil prices and lavish social spending but it came to an abrupt halt this year when global oil prices crashed. Prices have recovered somewhat but the economy has yet to follow suit.
Reporting by Eyanir Chinea and Julio Uribarry; Writing by Frank Jack Daniel, editing by Philip Barbara firstname.lastname@example.org; Tel: +58 212 263 7415; Reuters Messaging: email@example.com