UPDATE 2-Venezuela recession drags, GDP falls 5.8 pct Q1

* Oil GDP shrinks by 5.0 pct

* Non-oil GDP contracts by 4.9 pct

* Venezuela bucks recovery trend in Latin America

(adds details, figures)

CARACAS, May 20 (BestGrowthStock) – Venezuela’s economy is bucking
the global recovery trend to remain stuck in recession, with a
5.8 percent contraction in the first quarter of 2010, the
central bank said on Tuesday.

The South American OPEC member’s contraction in the first
three months, compared with the same period of 2009, had been
widely forecast by analysts who expect Venezuela to be the only
nation in Latin America with negative growth in 2010.

The 5.8 percent decline was exactly the same as the fall in
the first quarter of 2009.

Oil gross domestic product shrank 5.0 percent year-on-year
in the first quarter, while non-oil GDP shrank 4.9 percent.

The central bank attributed the contraction principally to
restricted access to foreign currency (Read more about trading foreign currency. for imports, lower
internal demand and electricity rationing.

Regarding the oil sector’s performance, in unusually blunt
language, the bank said it was due to falls in production,
“operative problems”, maintenance stoppages and the channeling
of diesel to run thermal generators during a power crisis.

After 11 years in power, President Hugo Chavez blames
Venezuela’s economic problems on a global crisis in capitalism
and the impact of a traditional elite he says are bent on
wrecking his model and driving him from power.

Critics, however, say his socialist policies — including
widespread nationalizations, currency controls and pressure on
the private sector — are ruining what should be one of Latin
America’s richest nations, due to its oil wealth.

In the first quarter figures, the public sector fell 2.8
percent while the private sector tumbled a far more dramatic
6.0 percent, compared to the same period of 2009.

Chavez has already said another contraction this year —
after last year’s fall of 3.3 percent — would not be a reason
to worry, since it was caused partly by a drop in imports of
non-essential items like new cars.

But the economic crisis, including runaway inflation, is
starting to erode his traditionally high popularity levels,
analysts say. Chavez faces a legislative election in September
that is a precursor to a presidential vote in 2012.

By sector, transport suffered the biggest drop in the first
quarter, contracting 15.9 percent, followed by trade with a
decline of 11.6, manufacturing down 9.9, financial institutions
down 9.7 and construction down 7.8.

Stock Market Report
(Reporting by Enrique Pretel, Eyanir Chinea, Marianna Parraga
and Patricia Rondon; Writing by Andrew Cawthorne and Daniel
Wallis; Editing by Diane Craft)

UPDATE 2-Venezuela recession drags, GDP falls 5.8 pct Q1