One of the world's biggest oil producers saw its economy shrink nearly 10% in the second quarter.

The 9.9% drop is one of the biggest in Venezuela's history and partly reflects a fall in its oil revenues, which have been hit by cutbacks and protesting oil workers.

This year, the country has witnessed one attempted coup, lived through spiralling inflation and a deep devaluation of the bolivar against the dollar.

Venezuela's commerce minister Ramon Rosales warned against expecting a speedy recovery. "We must set rational expectations and not expect a second-half recovery to completely wipe out these declines," he said.

President Hugo Chavez has tried to bring in reforms

The government has brought in reforms to boost the economy but their effects have yet to be felt and some analysts believe it should seek an agreement with the International Monetary Fund (IMF) first.

Many Venezuelans are running out of patience with President Hugo Chavez's handling of the economy, particularly his interference with PDVSA, the state oil company.

Since the attempted uprising in April, there have been frequent street protests and fear remains there will be further upheaval.

Reliance on oil

Sales of crude oil and oil products accounts for 80% of Venezuela's exports. In the second quarter, the petroleum sector of the economy fell 16.7%.

"In the area of petroleum, the production of crude oil has been affected by the nation's agreement on cutbacks within OPEC ( the oil cartel)" the central bank said in a statement.

"The production of refined products was influenced by less external demand," it added.

Oscar Garcia Mendoza, president of the Banco Venezolano de Credit said the economy had been hurt by "monstrous devaluation, lack of investment and deflation."

"The political aspect is fundamental to these results," he said.