Venezuela declares 'economic emergency'

Venezuela's socialist government decreed an "economic emergency" on Friday that will expand its powers and published the first data in a year that shows the depth of a recession fuelled by low oil prices and a sputtering state-led model.

The central bank, which has been lambasted by critics of President Nicolas Maduro's government for hiding statistics since the end of 2014, said the South American Opec nation's economy shrank 4.5 per cent in the first nine months last year. Inflation soared in that period to an annual rate of 141.5 per cent, the world's worst.

Venezuela's oil-dependent economy is forecast to perform abysmally again in 2016.

The government's decree, which the opposition-led assembly says it has the power to approve or reject, sets a 60-day "economic emergency" and would give Maduro wider powers to intervene in companies or limit access to currency.

"We are confronting a true storm," Maduro said during his state-of-the-nation address to Congress. "This is not Maduro's storm, as some believe, it is a situation throughout the country that affects every Venezuelan family."

He vowed the country would continue servicing foreign debt despite slipping international reserves. He also insisted "the time has come" to raise heavily subsidised fuel prices. Economists say doing so is vital to fortifying foreign reserves, but it is a politically costly move that Maduro has avoided despite repeated promises.

Maduro, a former bus driver and foreign minister who was elected to replace Hugo Chavez in 2013, has stuck to his mentor's policies of strict currency and price controls.

With massive shopping lines in Venezuela and widespread shortages of basics from milk to medicines, the government faces mounting pressure to change what critics call a failed model.

Venezuela depends on oil for 96 per cent of hard currency revenues. The average price for its basket of oil and refined products fell this week to $24.38, the lowest level in more than 12 years. - Reuters