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Message: Venny debt.
A devaluation will increase the debt burden on the economy
Undocumented commitments amount to $ 25 billion
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Unlike other petro Venezuela does not have a clear saving mechanism to decrease the risk perception FILE
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VICTOR SALMERÓN | EL UNIVERSAL
Tuesday November 27, 2012 12:00 AM
Pressured by the growing gap between spending and revenue contemplated by the Government to devalue the currency, a measure that would increase the amount of bolivars to receive petrodollars, but also have negative effects on public finances because it increases the debt burden. Rising the magnitude of the debt on the economy means that the market perception of risk rises and the country has to pay higher interest rates to obtain new financing. At the same time, the amount to pay principal and interest on the debt that has been incurred absorbs a larger portion of the budget and takes resources away from sectors such as health, education and infrastructure. economist and professor at the Central University of Venezuela, José Guerra, who has made a study with colleague Luis Oliveros to assess the trend of debt devaluation explains that dilutes the amount of debt in bolivars because the government will need fewer petrodollars to cancel but also shrinks the size of the economy, is ie GDP while foreign currency debt remains unchanged. Jose Guerra accurate than using an exchange rate of 4.30 bolivars per dollar, including all the country's commitments and projected growth that this economy will year debt now represents 57% of GDP. If you perform the same exercise using an average exchange rate of 5.2 bolivars per dollar to account for a portion of the economy operates through Sitme, the debt burden increases to 65% of GDP. If devaluation raises the average exchange rate to 7 per dollar, versus conservative scenario forecasts foreign financial institutions such as Bank of America, the total debt of the Republic would pass represent 70% of GDP, while a magnitude that is unmanageable and would not be at all comfortable, triple the amount in 2008. undocumented Jose Guerra explains that debt already stands at 131 billion dollars including loans from China, following a domestic debt at the exchange rate of 4.30 bolivars now represents 57 thousand 391 million dollars and has been called the unreported debt. "With this last concept we refer to debt not in bonds but the country needs to meet. They include PDVSA accounts that have issues with their suppliers and joint ventures, as well as an estimate of what it will have to cancel for expropriations companies like Rusoro, Conoco and Exxon, among others, "says Guerra. 's estimate that the debt is not documented is 25 thousand 453 million dollars, almost equal magnitude to the amount of the country's international reserves. A major factor is that unlike the Most petro Venezuela does not have a savings fund that allows to face an eventual decline in oil prices. Though the government says there are resources in the Fonden, a mechanism is opaque, no transparency and the Fund Stabilization available only three million dollars.http://www.eluniversal.com/economia/121127/una-devaluacion-aumentara-el-peso-de-la-deuda-en-la-economia
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