The fall in the international price of WTI oil to $22.53 a barrel will cause a loss of $850.5 million in income from natural gas exports, equivalent to 2% of the Gross Domestic Product (GDP). However, in the imports of oil derivatives, a saving of $271.7 million will be generated, approximately 0.7% of the GDP. The net impact would show a drop of 1.3% of GDP. The reduction will mainly affect the income of the National Treasury and the income of the governments, municipalities and universities from the Direct Tax on Hydrocarbons (IDH) and royalties.
The Central Bank of Bolivia (BCB) designed and implemented timely and effective monetary policy measures to ensure liquidity. Among these measures is the reduction of placements of securities through open market operations, which will be deposited in financial institutions. Concerning economic measures, the BCB confirmed that the Bs 500 family bond would reach more than 1.5 million students in the primary cycle, with an injection into aggregate demand of Bs 800 million ($114.9 mn), without this constituting a problem of illiquidity for the system. The BCB ensures the stability of the exchange rate, despite the context of parity volatility Latinamerica.
Restrictions on movement on the Covid-19 have caused flights to be reduced by 70%, and as a result, the Bolivian Airport Services Corporation (Sabsa) has stopped receiving Bs 1.4 million ($201,149) in just 19 days. The institution expects the situation to worsen and its income to fall by more than 50%.
Chile’s Terminal Puerto de Arica (TPA), through which 1.6 million tons of imported goods from overseas arrived in Bolivia in 2019, activated as of this week the sanitary protocols to prevent the spread of Covid-19, with the installation of several control barriers. It will not affect the movement of cargo.
CAF, the Latin American development bank, has made available to its member countries a “fast-disbursing emergency credit line” of up to US$2.5 billion to take action against the coronavirus pandemic. It consists of a contingent credit line of up to $50 million per country, for direct public health care. Authorities also have non-reimbursable technical cooperation resources of up to $400,000 per country for initiatives related to coronavirus pandemic emergencies.