The Bolivian economy is closing in on the current administration with increasing debt, shortage of dollars, high informality, trade deficit and erratic supply of hydrocarbons in the national market, although all is well for the government.
Last week, in a meeting with journalists, President Luis Arce said there was no crisis and that Bolivia’s economy would continue to grow, but he promised that hydrocarbon subsidies would continue.
He pointed to data on low inflation, low unemployment and growth of more than 2%, but suppressed inflation subsidized more than 2,000 million dollars, informally absorbed workers, but with dangerous conditions, according to published economic analysts. Their comments on social networks.
debt
At a forum on the Economic Outlook and Business Challenges 2024 organized by BRAQ CorpAffairs & Communications, financial analyst Jaime Dunn noted that Bolivia’s prospects for 2023 are not looking good.
While Bolivia’s public debt (external and internal) is about 80%, he announced that world debt levels continue to rise, but the government only refers to external debt to continue receiving international obligations, which remains at 29.5%.
The Minister of Development Planning, Sergio Cusiganchi, explained in statements to reporters that debt is not a problem for the national economy as Bolivia still has room.
Bolivia recently paid debt services in August and had to sell gold reserves to meet this obligation as the shadow of default receded, which is why the government pressured the government to ratify the gold law.
Dunn warned that international debt payments would be high, with most countries devoting more resources to complying with this obligation and neglecting other peoples.
A month ago, the president of the College of Economists, Fernando Romero, announced that the public debt reached more than 80% of the Gross Domestic Product (GDP), and the same assessment was indicated by international organizations such as the World Bank. .
Economist Alvarado A. Julio G. X wrote in @alvaradojulgas: No dollars. No fuel. Fiscal deficit has been wide since 2015. External and internal debt exceeded 80% of GDP. Net international reserves did not reach $2,000 million. 80% of workers are in the informal economy. But we are not in crisis.
Meanwhile, economist Gonzalo Chávez Álvarez wrote on the collapse of international reserves. Do you know who the culprits of Safarrancho are? OK, commentators.”
Likewise, businessman and economist Samuel Doria Medina X @SDoriaMedina wrote on the social network: The lack of dollars leads to continuous restrictions and distortions. The government influences private investments abroad, including managers, to capture foreign currency. A relief does not last long because the remedy is structural.
“As of September 2023, external debt reached 13,408 million dollars and internal debt reached 128,115 million bolivianos (about 18,407 million dollars),” says a Jubilee Foundation release from a few weeks ago.
For his part, Romero warned that next year’s General State Budget (PGE) 2024 will be more than 4,000 million dollars in external debt and 11,000 million in internal debt.
Fuels
A few weeks ago, the manufacturing and transport sectors felt the shortage of fuel in the national market, with all government announcements falling flat, stations closing at dawn and truck lines stretching to get diesel supplies among others. .
At first, the government tried to deny the truth, but later they pointed out that the shortage was due to failures in logistics, as the Ministry of Economy and Bolivia’s central bank did not pay suppliers.
Economists pointed out that the situation is complicated by the shortage of dollars in the national market. Similarly, a critical situation for the country, the shortage of foreign exchange and even more the fall in international reserves, reached in August. 2,147 million dollars.
Although the government reported that dollars are being provided to the financial system, they indicate that dollars are being received from this sector, but this is not enough to normalize the supply to the national market.
In this regard, some economists on social networks pointed out that the figure for November will be lower, so the late information from the BCB is delayed by three months.
Informality
Although the government shows unemployment at less than 4%, the lowest in the region, economists say informality and trafficking are consistent with this percentage, but remain precarious and without long-term insurance.
The situation could worsen due to trafficking, putting at risk more than 600,000 formal jobs in the national industry, which is why Pablo Camacho, president of the National Institute of Industry (CNI), noted in his year-end report. Public service is important for maintaining jobs and national institutions.
Govt
On the other hand, Gabriel Espinoza Y., economist and former director of BCB, wrote on export sectors. If you think commission is high, wait, 2024 is going to be overloaded. The second message is that the government protects its government’s economy and the rest (households and firms) don’t care.
The president told reporters at Ars Casa del Pueblo that we are doing well, but we can be better, and avoided referring to the observations made by economists about indicators affecting the national economy.
Trade
Meanwhile, international trade is also not good, the deficit has been recorded again, sales are falling more than purchases, and this is due to the shortage of dollars, but also the fall in natural gas exports.
The general manager of the Bolivian Institute of Foreign Trade (Ibce), Gary Rodríguez, expressed concern about the statistics and deficits Bolivian trade is seeing under the current administration, and suggested improving the agriculture, agro-industry and forestry logging sectors. Foreign currency should be brought into the country.
As of September 2023, exports fell by 23%, with almost $2.5 billion entering the country compared to the same period of the last administration; On the other hand, imports decreased by -3%.
Bolivia’s trade balance for the January-September 2023 period was a deficit of -79 million dollars, a 104% drop compared to the trade surplus recorded in the last administration.
