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Venezuela's 2025 budget set to grow nearly 11%, oil to contribute less

Published 12/03/2024, 01:47 PM
Updated 12/03/2024, 02:20 PM
© Reuters. FILE PHOTO: Venezuela's Vice-President and Oil Minister Delcy Rodriguez addresses the media at the Miraflores Palace, in Caracas, Venezuela November 18, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo

By Mayela Armas

CARACAS (Reuters) - Venezuela's government is planning a budget of $22.7 billion for next year, the country's Vice President Delcy Rodriguez told lawmakers at the government-allied National Assembly on Tuesday, up nearly 11% from spending this year of $20.5 billion.

"2025 will be a better year because we have learned to manage the difficulties," Rodriguez told lawmakers.

Contributions from state-run oil company PDVSA will fall 14.6% next year, according to a copy of the budget bill seen by Reuters.

Income from PDVSA - via sales and taxes - will cover 53% of the government's spending needs, equivalent to $10.1 billion, according to the exchange rate calculated by Venezuela's central bank.

In 2024, PDVSA contributed $11.9 billion.

PDVSA did not immediately respond to a request for comments on its forecast contribution.

Tax revenues will contribute $5.25 billion of the budget and will finance 28% of spending, according to the document. Other financing will come from mining, loans, and debt issuances.

The document gave no details on expected economic growth or forecasts for inflation.

After years of hyperinflation and amid broad U.S. sanctions, in 2022 the administration of President Nicolas Maduro began using orthodox policies including credit restrictions, lower public spending, a fixed dollar-bolivar rate and central bank sales of billions of dollars in foreign currency to tamp down consumer prices.

© Reuters. FILE PHOTO: Venezuela's Vice President and Oil Minister Delcy Rodriguez addresses the media at the Miraflores Palace, in Caracas, Venezuela November 18, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo

Maduro, who will begin his third term in January after a disputed election that the opposition and international observers say he lost, has said his government defeated inflation of more than 100,000% and prices in 2024 are similar to those in 2014.

But prices have increased in the final quarter of this year after the government allowed the bolivar currency to float in mid-October, beginning a depreciation that has seen the bolivar slide to about 45 versus the dollar, according to central bank figures.

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