Venezuela's economy grew by an estimated 4 percent in 2011 and will maintain strong growth in 2012, the central bank said Friday, expansion that may help President Hugo Chavez's bid for reelection next year. But the country's inflation rate remained stubbornly high at 27.6 percent, based on preliminary statistics, the bank said, signalling rising prices will remain a key concern in the Opec member nation as government spending shows no signs of abating in the run-up to the October vote.
"The recent performance of the economy demonstrates the reactivation of productive sectors, which affirms the expectation that the rhythm of growth will be maintained next year," the bank said in a statement. Growth was driven by an 11.2 percent expansion in the financial sector, 6.6 percent growth in commerce, and 5.5 percent growth in utilities such as electricity and water.
Government outlays in areas including education and health rose 5.3 percent, the bank said. The 4 percent growth - double the original estimate of 2 percent - contrasts with a 1.5 percent contraction in 2010 for Venezuela, which was one of only a few countries in the region whose economies shrank that year. Increased investment in the electricity sector, which suffered rationing in 2010, as well as greater spending on home construction following floods that destroyed houses around the country, also helped spur expansion.