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The economy begins to show signs of recovery. The private sector admits that in the first semester of the year, sales in shops located in malls rose by 25%, compared to sales during the same period last year, amid a halt in activities and the subsequent drop of imports, suspension of foreign currency purchase, and even price controls on first necessities.

On this occasion, Arnold Moreno, president of the Chamber of Shopping Centers, indicated that since public spending has increased, the population tends to have more resources available to buy goods and services.

He says that it is normal during election periods, that the state increases its investments or expenses in infrastructure, which reactivates employment.

Besides, he says that the population has understood that buying in shopping centers does not imply paying more; on the contrary, the offer of goods and services has diversified, and the consumer can benefit from the tranquility and security in these facilities.

Last year, these shopping and recreation centers had incomes of 7.28 trillion bolívares (Bs.). Four out of ten Venezuelans are assiduous clients of these establishments, either to shop or to seek entertainment in movie theaters, restaurants and game machines.

A study of the commercial sector by Datanálisis, reveals that for 35% of the population, the rate of visits to a mall is once every 15 or 30 days; another 27% are occasional visitors, and 15.6% admit that they never visit these places.

In 1999, 6% of the population preferred to shop in these malls; today, over 30% habitually acquire goods in these shopping centers. Anything from medicine to spare parts and hardware can be bought in these establishments. Besides the big shopping centers, the super markets and hyper-markets have also recovered their sales rate this semester.

The National Association of Supermarkets and Related Establishments (ANSA), which represents the main chains of supermarkets and drugstores in the country, reported that, product consumption had increased 36% between January and May compared to the same period last year.

The products with the highest increase in consumption levels in relation with the same period last year, were food (19%), dairy products (11%), non alcoholic beverages (50%), personal care products (27%), housekeeping products (23%), and alcoholic beverages (71%; 5% strong liquor and 95% beer).

Javier Macedo, president of ANSA, commented that the recovery of the demand would keep up for the second semester, since throughout the electoral period, anticipating the August 15th presidential referendum, people have postponed their vacations and are staying longer in the cities and urban areas, and thus supermarkets will have much affluence of shoppers.

BCV optimistic

The BCV reports a 28.35% rise on the sales volume, between January and April this year, compared to this parameter in the same period in 2003. As for 2003, the wholesale and retail demand for goods dropped 16.31% compared to 2002, as a result of the oil and private sector strike, and the forced halt of vital activities such as foreign commerce. According to economists, the imposition of foreign currency exchange controls, the decrease in foreign reserves, and the price control policy, were yet other factors that contributed to this downfall. Nevertheless, the governmental sector claims that these monetary exchange measures helped reestablish, towards the close of 2003, the level of the international reserves, which are now above 23 billion dollars.

BCV also reports a recovery of 29.12% in wholesales between January and April. The sectors of drinks and tobacco had a mild recovery of 0.69%.In April, this demand dropped 6.33%., mainly because stores had supplied their inventories at the beginning of the year.

In the retail market, the BCV statistics sustain that the sales volume rose 27.74% above that of the first four months of 2003. Motor vehicle sales increased by 28.19% in one year (April 2003-April 2004). In the same period, the sale of automobile spare parts increased by 23.98%; and the food market by 33.92%. As for the January-April periods of 2003 and 2004, the increase for this food market was 33.23%.

The private, as well as the official sector, expects a consumption increase report of 9% at the close of the year.

Jorgwe Botti, president of Consecomrecio (National Council of Commerce and Services) remarked that as political uncertainty diminishes and the electoral atmosphere clears up, the population will recover its enthusiasm and will be better motivated to acquire goods and services.

There is an expected increase in the buying power with the additional 10% increase in the minimum salary decreed by the government last May. With this percentage, the minimum salary will reach 321,235.20 Bs.(167.31$ at the official rate of 1,920 Bs. per dollar).

For the labor unions this salary does not cover the “basic basket”(minimum costs of food, housing, public services, education, transportation, clothing, footwear, and health), which is above 1,246,749 Bs..

The amount per month necessary to afford the basic food costs is over 500,000 Bs., although the official sector claims that this amount is the figure reported by the National Institute of Statistics is only 316,759.20 Bs. per month.