By Daniel Cancel

Feb. 20 (Bloomberg) -- Venezuelan President Hugo Chavez said the fall in crude prices to half the budgeted price is “hard and difficult” for the oil-exporting country.

The government won’t cut spending for social programs despite the decline in oil revenue and will instead tap a fund with China to continue funding development projects, Chavez said today in comments carried by state television. The 2009 budget estimated oil would sell for $60 a barrel.

“Despite the world economic crisis that is affecting the whole world and of course Venezuela, we won’t cut the budget for social programs,” Chavez said. “The oil price is very low, about half the price we budgeted. That is hard and difficult for Venezuela.”

Venezuela, the largest oil exporter in the Western Hemisphere, depends on crude for 93 percent of export revenue and 50 percent of the budget. The government will reduce spending and try to prevent the economy from entering a recession this year, Finance Minister Ali Rodriguez said in an interview with Venevision television yesterday.

Oil revenue into Venezuela has been about half the projected amount this year, Chavez said.

Venezuela and China created a $6 billion bi-national development fund in 2007. The fund is used to finance development projects in Venezuela, and China receives oil shipments in return.

On Feb. 9, a week before a national referendum to eliminate term limits, Chavez said the global economic crisis hadn’t touched “even a hair” of the Venezuelan economy. Voters approved scrapping the limits.

The Venezuelan crude oil and petroleum basket fell 5.5 percent to $33.93 a barrel today from $35.92 a barrel the prior week, the Energy and Oil Ministry said. The price for Venezuelan crude has plunged 73 percent from a record of $126.46 a barrel on July 18.

To contact the reporter on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net.