Caracas is the capital of a country that is in the midst of a social and economic crisis. H Hyperinflation in Venezuela hit almost 800% by the end of 2016, and disposable annual incomes in the households of Caracas dropped by 24% in real terms over 2011-2016. Labour productivity declined by 13% over the same period, not only due to inflation but also because of continuing political unrest in the capital. In 2016, Caracas generated a GDP of only USD9.8 billion, 16% less than in 2011.
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Although Venezuela's major oil deposits are located outside of Caracas, the city still benefits significantly from the revenue generated by the oil industry. In addition, Caracas has a large and productive business services sector, compared with other parts of the country. In 2016, GVA produced per employee in Caracas, at USD6,300, was 72% higher than the average in the rest of Venezuela.
Caracas's households enjoyed on average 42% higher disposable income than those in the remaining parts of the country in 2016. However, when compared to other major metropolitan areas of Latin America, like Quito (USD17,800 annual disposable income per household in 2016) or Buenos Aires (USD28,700), Caracas's households lag behind.
In 2016, expenditure on consumer items (excluding housing and transport) was 27% higher in Caracas than elsewhere in Venezuela. In particular, per household spending on healthcare, education and communications was high in the capital city in 2016, surpassing the rest of the country averages by 106%, 93% and 70%, respectively.
Consumer expenditure on housing and transport in Caracas was 50% above the rest of the country average in 2016. The biggest difference between Caracas and other parts of the country was in housing expenditure. In 2016, households in Caracas spent 77% more on housing than those outside Caracas.