Venezuela is more dependent on oil now than it was when Mr Chávez took power. Oil brought in 92% of export revenues in the first nine months of 2008, compared with 64% in 1998. The 2009 budget, which foresees public spending of $78 billion, assumes an average oil price of $60 a barrel (and economic growth of 6%). Venezuelan crude, much of which is heavy (meaning viscous), currently sells for around half that figure. The budget also assumes that Venezuela produces 3.4m barrels of oil per day. Independent sources, including OPEC, say output is about 1m barrels less.

Many private-sector economists believe that, if the oil price levels out at somewhere close to the budgeted figure, the government will be able to muddle through until 2010. But the economy is already cooling rapidly. Even optimists predict growth of no more than 3%, higher inflation and a fiscal deficit of at least 3%. Some expect zero growth. Partly because Mr Chávez has harassed the private sector, imports have increased much faster than local production (see chart). That trend now looks unsustainable.

Via The Economist.