The Associated Press August 8, 2010, 4:59PM ET

Chavez: Venezuela's economy soon to recover

President Hugo Chavez expressed optimism Sunday that Venezuela is about to emerge from a recession, even describing its oil-dependent economy as robust.

Chavez suggested state television should broadcast a series of programs focusing on the strength of the economy as a way to debunk what he called erroneous predictions from analysts of more economic problems on the horizon.

"They say that Venezuela's economy is in shambles," Chavez said on his weekly television and radio program. "Our economic, social and political system is so strong ... that we've increased salaries this year despite the fall in gross domestic product."

"We are going to revive" the economy, he added.

In addition to the decline in economic output, Venezuela is struggling with the highest inflation rate in Latin America -- 30.5 percent.

The economy shrank 5.8 percent in the first three months of 2010 from the same period a year earlier. It was pulled down by a 5 percent decline in the oil sector, a 6 percent decrease in the private sector and a 27.9 percent fall in private investment, Venezuela's central bank said.

That followed a 2.9 percent decline for all of 2009.

Business owners blame Chavez's socialist-oriented economic policies for the country's financial woes, arguing that government-imposed price controls, expropriations and strict currency controls are strangling the economy.

Many analysts expect the economy to remain stagnant, and Chavez's critics scoffed at the president's rosy assessment of the economy.

"There's no denying that there's an economic collapse here," said Delsa Solorzano, an opposition politician. "The president is insulting the intelligence of Venezuelans."

Solorzano attributed the nation's economic problems to "a lack of private investment, state expropriations that have led to reduced industrial and agricultural production, and terrible administration and management of our oil earnings," which accounts for approximately 32 percent of the government's budget.

"I don't see any possibility of recovery because there are not plans to change the economic policies," Solorzano said.


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