república bolivariana de venezuela ministerio de finanzas venezuela: economic and financial summary...

República Bolivariana de VenezuelaRepública Bolivariana de VenezuelaMinisterio de FinanzasMinisterio de Finanzas

Venezuela:Venezuela:Economic and Financial SummaryEconomic and Financial Summary

June 9, 2004June 9, 2004Washington, DCWashington, DC

22República Bolivariana de VenezuelaRepública Bolivariana de Venezuela

Key Messages

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

Debt Management


Economic Indicators


International Reserves and Oil Price

8

10

12

14

16

18

20

22

24

Jan 00 Jan 01 Jan 02 Jan 03 Jan 04

.

June 7, U.S.$23.1Bn

12

15

18

21

24

27

30

33

36

Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04

.

International Reserves (U.S.$Bn)

Venezuela Basket (U.S.$ per barrel)

Average YTD 2004*

U.S.$ 30.0pb

U.S.$ 34.5pb*

Source: Banco Central de Venezuela and MF

Source: Ministerio de Energía y Minas and MF(*) As of June 4

Mar 20, 2003: U.S.$9.0Bn

2001 Avg. $20.3pb

2002Avg. $22.2pb

2003Avg. $25.5pb


Economic Activity

29.8

%

9.0%

-7.2

%

-9.6

%

-27.

9%

-16.

7%

-5.6

%

-9.1

%-3.8

%

0.9%3.

3%

3.1%4.0%5.

7%

3.5%

2.7%

0.9%

-4.1

%

-4.3

%

-7.4

%

-8.5

%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q12000 2001 2002 2003

Real GDP yoy % change

1999 2004


Inflation

0%

1%

2%

3%

4%

5%

6%

May 01 Nov 01 May 02 Nov 02 May 03 Nov 03 May 0410%

20%

30%

40%mom % chng (lhs)yoy % chng (rhs)Line 3

Average 2001 12.5%

Average 2002 22.4%

Average 2003 31.4%

21.8%

38.7%

Average 2004 23.3%

Source: Banco Central de Venezuela and MF


Cost of Funding

10%

15%

20%

25%

30%

35%

40%

45%

Jan Apr Jul Oct Jan Apr

44.0%

90-day Treasury Bill (YTM)

Source: Ministry of Finance

2003 2004

500600700800900

1,0001,1001,2001,3001,4001,500

Jan Mar May Jul Sep Nov Jan Mar May

1,474 JP Morgan EMBIG®

(Venezuela Component, Stripped Spread, bps)

Source: JP Morgan and Ministry of Finance

2003 2004

11.5%

671


Non-oil Tax Revenues: Q1’04 Results

(Billion of bolivars)(Billion of bolivars)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. BudgetQ1’04 Results vs. Budget 33.0% 34.3% 29.2%

2003 Q1 Results 2,287.6 1,803.4 484.2

Q1’04 vs. Q1’03Q1’04 vs. Q1’03 108.7% 100.7% 138.8%

Source: SENIAT and MF


Debt Indicators

6.6%4.8% 4.3% 5.3%

8.3%10.9% 11.1%

15.3%

10.5%

36.2%

27.0%24.5%

22.1%

18.0% 17.8%

22.6%

29.8%27.6%

0%

10%

20%

30%

40%

50%

1996 1997 1998 1999 2000 2001 2002 2003 2004F

Domestic Foreign Total

• 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

% o

f P

IB

1100

República Bolivariana de VenezuelaRepública Bolivariana de Venezuela

Fiscal Indicators

1111


Consolidated Public Sector (% of GDP)

1998 1999 2000 2001 2002* 2003*

USES 8.4% 3.7% 0.6% 9.2% 7.8% 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% 2.9% 2.3% 2.0% 3.3% 6.8%

SOURCES 8.4% 3.7% 0.6% 9.2% 7.8% 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%

o/w FIEM 0.0% -0.2% -3.6% -1.2% 3.3% 2.5%Source: Ministry of Finance(*) Preliminary

1122


Central Government (% of GDP)

Source: Ministry of Finance(*) Preliminary(F) Forecast

1998 1999 2000 2001 2002* 2003* 2004F

USES -2.8% -3.7% -4.5% -7.1% -8.1% -11.9% -8.7%

Deficit -3.8% -1.6% -1.6% -4.2% -3.3% -3.9% -2.5%

Amortizations 1.0% -2.0% -2.9% -2.9% -4.7% -8.1% -6.2%

Domestic 1.7% -0.4% -1.4% -1.3% -2.2% -3.5% -3.0%

External -0.7% -1.6% -1.5% -1.5% -2.5% -4.6% -3.2%

SOURCES 2.6% 3.6% 4.4% 6.6% 7.7% 11.9% 8.7%

Domestic 0.8% 3.0% 5.1% 4.7% 4.3% 8.2% 4.0%

External 1.8% 0.6% -0.7% 1.9% 3.3% 7.0% 4.7%

Markets 4.7% 3.2%

Multi/Bila 1.8% 1.5%

FIEM -1.7% 0.1% 1.7% 0.5% 0.0%

Other -3.3% 0.0%

1133


Debt Management in 2004

January 7

March 16

March 22

March 24

March 25

U.S.$1,000mn 9.375% 2034 Global

First Investment Units Offering: U.S.$1,500mnU.S.$500mn 1.15% 6-month NoteU.S.$500mn Bolivar-denominated FRN due 2008U.S.$500mn Bolivar-denominated FRN due 2009

First Tender for Bolivar-denominated debtU.S.$720mn of debt maturing in 2004

Second Investment Units Offering: U.S.$1,500mnU.S.$500mn 1.15% 6-month NoteU.S.$500mn Bolivar-denominated FRN due 2009U.S.$500mn Bolivar-denominated FRN due 2010

Ministry of Finance advances payment for U.S.$465mn of March 26th and 29th maturities

Ministry of Finance buys-back U.S.$584mn for Bolivar-denominated debtU.S.$251mn of debt maturing in 2004U.S.$334mn of debt maturing in 2005

1144


Debt Management in 2004 (Cont.)

April 7

April 12

May 5

June 7

U.S$1,000mn Libor 3m+100bps 2011 Reg S.

Ministry of Finance buys-back U.S.$133mn for Bolivar-denominated debtU.S.$75mn of debt maturing in 2004U.S.$58mn of debt maturing in 2005

Ministry of Finance buys-back U.S.$257mn of Bolivar-denominated debt maturing in 2004 held by government agencies

Ministry of Finance Tenders U.S.$1,000mn of U.S.$-denominated notes maturing in Sep 2004

1155


Domestic Amortization Profile

0

200

400

600

800

1,000

1,200

1,400

Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul

2004 2005 2006 2007 2008 2009

60% of amortizations fell in 2004 and 2005

89% of amortizations fell in between 2004 and 2006

2010

Billio

n of

Bol

ivars

1166


2004 Funding

FUNDING NEEDS 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%

1177


Venezuela: a Worthwhile Investment

0

100

200

300

400

500

600

Jan Mar May Jul Sep Nov Jan Mar May

JP Morgan EMBIG®

(Venezuela Component minus composite, Stripped Spread, bps)

Source: JP Morgan and Ministry of Finance

2003 2004

599

89

Venezuela:Venezuela:Economic and Financial UpdateEconomic and Financial Update

June 2004June 2004

república bolivariana de venezuela ministerio de finanzas venezuela: economic and financial summary...

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