2024 presidential elections will increase public spending in Venezuela

Venezuela's presidential elections, which will take place on July 28 of this year, will be the main factor in an increase in public spending, particularly in the months leading up to the electoral process

On July 28, the presidential elections will be held in Venezuela. Some economists believe that the Executive will put more money into circulation on the streets to generate a feeling of economic improvement.

The measure could be the result of an increase in public spending in the months prior to the elections, a period marked by the electoral campaign.

The economist and director of Ecoanalítica, Asdrúbal Oliveros, spoke on the subject, estimating that in the coming months “the increase in public spending will have its advantages in the perception of the economy, although it can work against, if not controlled, stability in the price of the dollar.”

According to the specialist, various scenarios can be presented for the #28Jul elections:

Increase in public spending

Between May and July, the government will inject money into the economy. “In fact, Oliveros expects that these three months will be the ones with the greatest public spending and greatest economic and productive activity in Venezuela throughout 2024.”

Increase in social bonuses

It is known that one of the Maduro government’s ways of improving the income of Venezuelans has been through adjustments in social bonds through the Patria System. It is speculated that in the month of May there will be an announcement regarding the increase in the Minimum Monthly Income of the public sector, retirees and pensioners, without this meaning an increase in the real salary.

Benefits to key sectors of the economy

According to the specialist, the sectors of the economy that will benefit from the increase in public spending will be those related to mass consumption. “In a country in which the majority of the population does not cover its basic needs, the food, medicine and personal care sector will be the main beneficiaries of greater purchasing power.”

Increase of exchange rate

An increase in public spending has its cost. The injection of money into the economy entails upward pressure on prices as well as the exchange rate. Oliveros recommend staying attentive to the fluctuation in the price of the official dollar in the quarter prior to the elections. On the other hand, it recognizes the government’s ability to “intervene in the exchange market and prevent the aggressive slide of the exchange rate.”

Uncertainty caused by sanctions on the country

The director of Ecoanalítica points out that the sanctions maintain uncertainty in the population. In April, the United States is expected to restore economic sanctions on PDVSA and Venezuela, with a strong impact on the economy.


Source: elestimulo

(Reference image source: Unsplash+, in collaboration with Getty Images)

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