CARACAS: Venezuelan legislators voted on Tuesday to raise the country's debt ceiling for this year by 65 percent in a move the government hopes will fuel economic activity after growth slowed sharply during the first quarter.
It was the third year in a row that the National Assembly has approved a mid-year increase to the level of debt that the government can contract on the local and international markets.
The Assembly, dominated by supporters of socialist President Nicolas Maduro, voted to back a government proposal to incur up to 76 billion bolivars in additional debt in 2013, about $12 billion at the official rate of 6.3 bolivars to the dollar.
The legislators had earlier approved the government taking on $18.5 billion debt this year. As in previous years, the administration has increased its ability to borrow to fund the social welfare programs of the late President Hugo Chavez.
Ricardo Sanguino, president of the Assembly's finance commission, said the government hoped to assign 10 million bolivars of the new debt ($1.5 million) to a program that aims to build hundreds of thousands of homes.
Opposition lawmakers had argued against the increase, saying the government planned to use the money for spending on Maduro's supporters, and not for the good of all Venezuelans.
Economic growth slowed to 0.7 percent in the first quarter of this year, from 5.9 percent in the same period in 2012.
Last month, Finance Minister Nelson Merentes said the government planned to continue issuing debt during the second half of this year, but would prioritize doing so in the domestic market rather than sell billions of dollars of external bonds as it has done in recent years.
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