``Everyone is hurting,'' said Nelson Wada, manager at men's clothing store Norton and Wilson in Caracas. Sales at the store have dropped 50 percent this year, Wada said, without specifying what they were. ``We're holding on but a lot of the stores here have gone out of business. It's grim.''
Restrictions on dollar purchases set by the government in January amid a two-month nationwide strike have prevented businesses from importing parts, reducing production. The government implemented the limits because the strike, which was aimed at forcing President Hugo Chavez from office, slashed production of oil, the country's main source of dollars.
A Bloomberg survey of five economists had forecast a second quarter decline of 13 percent.
Venezuela's construction industry shrank 50.7 percent in the second quarter, the central bank reported. The retail industry contracted 17.4 percent, while manufacturing declined 14.3 percent. Venezuela's recession is the worst since the central bank began keeping records in the 1950s.
The oil industry, which accounts for about a third of the $80 billion economy, contracted 2.9 percent, the central bank said. The public part of the industry, centered at state oil company Petroleos de Venezuela SA, shrank 7 percent, while the private oil industry rebounded 46 percent. ***