Venezuela to pay off $4.6bn debts

Mr Chavez has vowed to pay contractors by the end of 2009

Venezuela will pay off more than $4.6bn (£2.8bn) in debts owed by its state-run oil producer in an attempt to boost its slowing economy.

President Hugo Chavez said Petroleos de Venezuela (PDVSA) will pay the debts it has accumulated with oil contractors by the end of the year.

The company fell behind on payments earlier this year, prompting some firms to stop working.

The government will also provide loans to companies in other industries.

Companies in manufacturing, construction and trade sectors are expected to benefit from state assistance.

The government is aiming for flat growth in 2009, after a 1% contraction in the first six months of the year.

As part of nationalising much of the oil and gas industry in recent years, Mr Chavez has taken the work of specialist contractor companies out of private hands and put it under the wide-reaching umbrella of PDVSA.