After finishing the first half of the semester, you should be able relate what you have learned so far into the macroeconomic data. So, read the following statements and explain that using what you have learned such as productivity & production and GDP growth & GDP components. Then, relate that to the attached tables:
What happened to the GDP in general and the GDP by economic activity on table 1 or table 4 (table 4 is easier) during the pandemic? Which sector has been affected more during the pandemic and why would you think this sector has been affected more?
One of the most important targets for the Vision 2030 is to switch the production in Saudi Arabia from mostly depending on Oil to diversify its production, would you think we are going into the target of diversifying production through looking at the tables 15 & 16 (table 16 is easier to see because it shows the growth) from 2018 to 2021. You can also look at tables 8 and 10 for annual data.
It’s apparent that the Venezuelan government spending is significantly exceeding that which it is taking in and therefore putting them in a budget deficit. The government ceased releasing statistics with regards to the magnitude of the country’s budget deficit a few years ago. Nevertheless, reducing it is deemed a prime concern. However the CIA have estimated that the deficit is approximately 46% of the countries gross domestic product during the period of 2017 (Bloomberg 2019). One approach in hope of restoring Venezuela’s previously satisfactory economy, is for them to loan a significantly large amount of money – $60 billion over the period of three years – to them. Theoretically, this would enable the central bank to terminate the printing of Bolívar’s. This would, in theory, diminish the on going decrease of the Bolívar’s value – which has lost 99% of its value since 2013 (Bloomberg 2019). Similarly, replacing the national currency all together with a more stable currency – such as the US dollar – would be of benefit. Another commonly identified flaw that Venezuela is victim of, is their reliance upon a single and arguably unstable, commodity – being crude oil. As previously mentioned, the country would benefit immensely from expanding their number and range of export goods. Over the past decade, the difficulties associated with oil extraction and production have seemingly become more apparent. Not only this but the imposition of several sanctions on Venezuela’s oil industry, on behalf of the US, are significantly contributing to the industry’s downfall. The sanctions have meant that the US – one of Venezuela’s key oil associates – are blocked from doing business with Venezuela. They were implemented in hope of pressurising Venezuela’s President – Maduro – into stepping down. Presumably, the sanctions will stay in play until this is fulfilled, therefore broadening their commodities seems to be a favourable move. Switching from the Bolívar to the U.S. dollar and acknowledging the underlying issue of their high dependence on a – somewhat undependable – commodity in conjunction with other credible government interventions will work best to maximise the potential stabilisation of Venezuela’s economy in years to come.>GET ANSWER