Venezuela sees economy shrinking 1.9 percent

Venezuela's economy shrank an estimated 1.9 percent in 2010 in a second year of recession as the South American nation lags in the recovery cycle after the global financial crisis, the Central Bank said on Thursday. The Opec member's economy contracted 3.3 percent last year when it entered recession, but President Hugo Chavez's government says Venezuela is now pulling out of it and is on course for 2 percent growth in 2011.
"We foresee a positive tendency for 2011," said the Central Bank report on the preliminary economic data for this year. The report said oil GDP shrank 2.2 percent in 2010 while the non-oil economy fell 1.8 percent. After estimated annual inflation of 1.6 percent in December, the annual consumer price rise for 2010 will be 26.9 percent, up from 25.1 percent last year, the bank said. That makes Venezuela's inflation among the highest in the world.