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Venezuela's economy grew 5.2 percent in the third quarter as compared to the same period last year, officials said Tuesday, crediting both the private sector and an increase in government spending.
Venezuela this year is among the fastest growing economies in Latin America. The economy expanded at a quicker rate than last year's third quarter, when growth stood at 4.4 percent.
"Venezuela entered a new phase in its stable, sustainable growth," Planning Minister Jorge Giordani said at a news conference where he and the Central Bank president announced the quarterly financial results.
The country's economy has now been expanding for eight consecutive quarters. The Central Bank said the strong growth between July and September was due in part to more supplies of imported goods and raw materials, as well as more government spending on public housing projects.
The housing boom came ahead of the Oct. 7 election, when President Hugo Chavez was re-elected to another six-year term. Thanks to the government's housing projects, the construction sector posted 12.6 percent quarterly growth.
Still, more money in the economy and strong consumer spending propelled private sector growth of 5.7 percent, while the public sector rose more modestly at 3.4 percent.
The larger amount of money in the economy boosted imports, which increased 17 percent during the quarter as compared to the same period in 2011, as well as the banking sector, which grew a whopping 35.9 percent.
Venezuela remains a major oil producer, and relatively high oil prices have helped bring more money into government coffers, which in turn has enabled more spending. Yet in the latest quarter, the country's non-oil sector grew 5.4 percent, outpacing 1.1 percent growth in the oil sector.
The economic expansion has been driven largely by government spending that has grown more than 20 percent so far this year, said Angel Garcia Banchs, an economist and director of the Venezuelan consulting firm Econometrica.
Garcia Banchs said he thinks such rapid growth isn't sustainable, citing government deficit problems as well as construction and banking industries that he said aren't capable of continuing with such performance.
Venezuela also has some unresolved currency issues that could complicate the economy in the coming months. The government maintains strict currency exchange controls that fix the official exchange rate at 4.3 bolivars to the dollar and require both Venezuelans and businesses to apply to a government agency to obtain dollars at that rate.
However, a scarcity of dollars has recently prompted a nosedive in the value of the bolivar on the black market, where the U.S. dollar has recently been fetching three times the official rate.
Venezuelan economists say the sliding value of the bolivar increases pressure on the government to devalue. Some business leaders have also warned that importers and other companies are having difficulties obtaining dollars, and that those troubles could contribute to an eventual cooling of the economy.
Central Bank president Nelson Merentes, however, dismissed such suggestions and said: "We're going to keep growing."