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UPDATE 2-Chavez says Venezuela GDP may shrink again in 2010

Published 04/25/2010, 09:43 PM
Updated 04/25/2010, 10:00 PM

* Chavez previously predicted slight growth this year

* Blames economic trouble on crisis in capitalism

* Says GDP down in 1st quarter (Adds details of 1st quarter GDP)

CARACAS, April 25 (Reuters) - Venezuela's economy could shrink for the second consecutive year in 2010, President Hugo Chavez said on Sunday, reversing an earlier forecast of growth in a sign the OPEC nation is struggling to recover from recession.

"The Venezuelan economy, according to the IMF, and repeated by the World Bank yesterday, entered into recession in 2009 -- that's true, and will shrink again in 2010 -- that could be true," Chavez said at a meeting of his Socialist Party.

He also said preliminary data showed the economy had shrunk in the first quarter of this year. The GDP data for the first three months of the year is due in May.

In February the leader said the economy would likely grow between 0.5 and 1 percent in 2010. Venezuela's GDP fell by 3.3 percent last year and deepened by the fourth quarter to 5.8 percent as other countries in the region have begun to pull out of the slump.

Chavez blamed the country's problems on a crisis in capitalism. He said another fall in GDP this year was not reason to worry, since it was caused in part by a drop in imports of non-essential items such as new cars.

He said the world economic crisis was an opportunity for socialism to spread and take root, saying capitalism over-consumption was leading to the destruction of the planet.

Venezuela's economy grew rapidly for five years before the recession, driven by heavy public spending of record oil revenues. (Reporting by Frank Jack Daniel; Editing by Bernard Orr)

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