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República Bolivariana de Venezuela
Ministerio de Finanzas
Venezuela:
Economic and Financial Summary
Washington, DC
June 9, 2004
Key Messages
Debt Management
 With the issuance of U.S.$1bn in FRNs due 2011 on April
22nd, Venezuela completed its foreign-currency financing
 As of today, the Republic has paid down 83% of domestic
amortizations, tackling a front-loaded domestic-debt
amortization schedule
 The Ministry of Finance holds U.S.$1.9bn of funds raised
through refinancing and restructuring authorizations
 In 2004, debt management has concentrated in balancing
the risks in the composition of funding, after a reentry in
foreign markets in 2003
2
República Bolivariana de Venezuela
Economic Indicators
3
República Bolivariana de Venezuela
International Reserves and Oil Price
.
24
International Reserves (U.S.$Bn)
June 7, U.S.$23.1Bn
22
20
18
16
12
10
8
36
U.S.$ 34.5pb*
33
Mar 20, 2003: U.S.$9.0Bn
Jan 00
Jan 01
Jan 02
Jan 03
Source: Banco Central de Venezuela and MF
Venezuela Basket (U.S.$ per barrel)
30
Jan 04
2003Avg.
$25.5pb
27
24
21
18
15
2001 Avg.
$20.3pb
2002Avg.
$22.2pb
Average YTD 2004*
U.S.$ 30.0pb
12
Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03
Source: Ministerio de Energía y Minas and MF
(*) As of June 4
4
Jan 04
República Bolivariana de Venezuela
.
14
Economic Activity
29.8%
Real GDP yoy % change
40%
30%
9.0%
0.9%
-10%
-7.2%
-9.6%
-5.6%
-9.1%
-20%
-30%
-27.9%
-16.7%
Q1
1999
5
Q3
Q1
2000
Q3
Q1
2001
Q3
10%
0%
-3.8%
3.3%
3.1%
4.0%
5.7%
3.5%
2.7%
-4.1%
-4.3%
-7.4%
-8.5%
0.9%
20%
Q1
2002
Q3
Q1
2003
-40%
Q3
Q1
2004
República Bolivariana de Venezuela
Inflation
6%
5%
mom % chng (lhs)
yoy % chng (rhs)
Line 3
40%
38.7%
Average 2003 31.4%
4%
30%
3%
Average 2002 22.4%
21.8%
2%
1%
Average 2004 23.3%
20%
Average 2001 12.5%
0%
10%
May 01 Nov 01 May 02 Nov 02 May 03 Nov 03 May 04
Source: Banco Central de Venezuela and MF
6
República Bolivariana de Venezuela
Cost of Funding
90-day Treasury Bill (YTM)
45%
44.0%
40%
35%
30%
25%
20%
15%
10%
11.5%
Source: Ministry of Finance
Jan
2003
Apr
Jul
Oct
Jan
2004
Apr
1,500 1,474
1,400
JP Morgan EMBIG®
(Venezuela Component, Stripped Spread, bps)
1,300
1,200
1,100
1,000
900
800
700
600
Source: JP Morgan and Ministry of Finance
500
Jan Mar May Jul Sep Nov Jan Mar
2003
2004
7
República Bolivariana de Venezuela
671
May
Non-oil Tax Revenues: Q1’04 Results
Total Non-Oil
Tax Revenues
Internal
Revenues
Customs
Duties
2004 Q1 Budget
3,589.6
2,694.7
894.9
2004 Q1 Results
4,775.1
3,618.8
1,156.3
Q1’04 Results vs. Budget
33.0%
34.3%
29.2%
2003 Q1 Results
2,287.6
1,803.4
484.2
Q1’04 vs. Q1’03
108.7%
100.7%
138.8%
(Billion of bolivars)
Source: SENIAT and MF
8
República Bolivariana de Venezuela
Debt Indicators
50%
Domestic
% of PIB
40%
Total
36.2%
30%
27.0%
29.8%
24.5%
18.0%
6.6%
8.3%
4.8%
4.3%
27.6%
22.6%
22.1%
20%
10%
Foreign
17.8%
10.9%
15.3%
11.1%
10.5%
5.3%
0%
1996
1997
1998
1999
2000
2001
2002
2003 2004F
• Debt to GDP increases during 2002 and 2003 were mainly due to
an accumulated 17% real GDP contraction for the 02-03 period
and exchange-rate effects on the external debt balance
9
República Bolivariana de Venezuela
Fiscal Indicators
10
República Bolivariana de Venezuela
Consolidated Public Sector (% of GDP)
1998
8.4%
1999
3.7%
2000
0.6%
2001
9.2%
2002*
7.8%
2003*
9.7%
Deficit (Surplus)
4.3%
-0.7%
-4.3%
4.5%
1.0%
-1.2%
Amortizations
4.2%
4.5%
4.9%
4.8%
6.9%
10.9%
Domestic
0.9%
1.6%
2.6%
2.7%
3.6%
4.1%
External
3.3%
8.4%
2.9%
3.7%
2.3%
0.6%
2.0%
9.2%
3.3%
7.8%
6.8%
9.7%
Domestic
3.9%
2.3%
3.9%
8.0%
3.0%
2.0%
External
4.5%
1.4%
-3.2%
1.3%
4.8%
7.7%
0.0%
-0.2%
-3.6%
-1.2%
3.3%
2.5%
USES
SOURCES
o/w FIEM
Source: Ministry of Finance
(*) Preliminary
11
República Bolivariana de Venezuela
Central Government (% of GDP)
USES
Deficit
Amortizations
Domestic
External
SOURCES
Domestic
External
Markets
Multi/Bila
FIEM
Other
1998
-2.8%
-3.8%
1.0%
1.7%
-0.7%
2.6%
0.8%
1.8%
1999
-3.7%
-1.6%
-2.0%
-0.4%
-1.6%
3.6%
3.0%
0.6%
2000
-4.5%
-1.6%
-2.9%
-1.4%
-1.5%
4.4%
5.1%
-0.7%
2001
-7.1%
-4.2%
-2.9%
-1.3%
-1.5%
6.6%
4.7%
1.9%
2002*
-8.1%
-3.3%
-4.7%
-2.2%
-2.5%
7.7%
4.3%
3.3%
-1.7%
0.1%
1.7%
2003*
-11.9%
-3.9%
-8.1%
-3.5%
-4.6%
11.9%
8.2%
7.0%
4.7%
1.8%
0.5%
-3.3%
Source: Ministry of Finance
(*) Preliminary
(F) Forecast
12
República Bolivariana de Venezuela
2004F
-8.7%
-2.5%
-6.2%
-3.0%
-3.2%
8.7%
4.0%
4.7%
3.2%
1.5%
0.0%
0.0%
Debt Management in 2004
January 7
U.S.$1,000mn 9.375% 2034 Global
March 16
First Investment Units Offering: U.S.$1,500mn
U.S.$500mn 1.15% 6-month Note
U.S.$500mn Bolivar-denominated FRN due 2008
U.S.$500mn Bolivar-denominated FRN due 2009
March 22
First Tender for Bolivar-denominated debt
U.S.$720mn of debt maturing in 2004
March 24
Second Investment Units Offering: U.S.$1,500mn
U.S.$500mn 1.15% 6-month Note
U.S.$500mn Bolivar-denominated FRN due 2009
U.S.$500mn Bolivar-denominated FRN due 2010
Ministry of Finance advances payment for U.S.$465mn of March 26th and 29th maturities
March 25
13
Ministry of Finance buys-back U.S.$584mn for Bolivar-denominated debt
U.S.$251mn of debt maturing in 2004
U.S.$334mn of debt maturing in 2005
República Bolivariana de Venezuela
Debt Management in 2004 (Cont.)
14
April 7
U.S$1,000mn Libor 3m+100bps 2011 Reg S.
April 12
Ministry of Finance buys-back U.S.$133mn for Bolivar-denominated debt
U.S.$75mn of debt maturing in 2004
U.S.$58mn of debt maturing in 2005
May 5
Ministry of Finance buys-back U.S.$257mn of Bolivar-denominated debt maturing in 2004
held by government agencies
June 7
Ministry of Finance Tenders U.S.$1,000mn of U.S.$-denominated notes maturing in Sep 2004
República Bolivariana de Venezuela
Domestic Amortization Profile
Billion of Bolivars
60% of amortizations fell
in 2004 and 2005
1,400
89% of amortizations fell in
between 2004 and 2006
1,200
1,000
800
600
400
200
0
Jan
Jul
2004
15
Jan
Jul
2005
Jan
Jul
2006
Jan
Jul
2007
Jan
Jul
2008
Jan
Jul
2009
Jan
Jul
2010
República Bolivariana de Venezuela
2004 Funding
FUNDING NEEDS
16
8.7%
Global 2034
1.0%
Units Offering (Bs)
2.2%
Units Offering (U.S.$)
1.1%
FRN 2011
1.0%
Weekly Auctions
0.8%
COMPLETED
6.1%
REMAINING
2.6%
Domestic
1.1%
Multi/Bila
1.5%
República Bolivariana de Venezuela
Venezuela: a Worthwhile Investment
JP Morgan EMBIG®
599
600
(Venezuela Component minus composite, Stripped Spread, bps)
500
400
300
200
100
0
89
Source: JP Morgan and Ministry of Finance
Jan
2003
17
Mar
May
Jul
Sep
Nov
Jan
Mar
May
2004
República Bolivariana de Venezuela
Venezuela:
Economic and Financial Update
June 2004