While the debate over re-scheduling the 2020 general election will drive uncertainty over the near term, Añez’s controversial tenure in office and ideological debates over economic and social policies pose risks to policy continuity and social stability in the longer term. We at Fitch Solutions have modestly revised down Bolivia’s score in our Short-Term Political Risk Index to 47.0 out of 100, from 47.2 previously.
YPFB revealed that it acquired the product at $102 a barrel. Of this amount, 45% corresponds to the payment for the input and 55% to the logistics. The final cost of importing diesel or gasoline is composed of the international quotation of the product plus the costs of global transport logistics (ship, barge or tank), and national logistics (cistern or train), the cost of storage in an international plant when applicable, international insurance of the product, the price of the supply service and financial expenses.
We expect Bolivia to register average annual growth of 3.1% in refined production over 2020-2024. A stabilisation in tin prices will support capacity expansions at Bolivia’s key tin mines, Colquiri and Huanuni. The government had approved $75mn in funding for a new processing plant at Colquiri, which was targeted for completion in 2020 and was expected to double output at the mine but the Covid-19 pandemic casts downside risks on project development in the country.
During the first quarter of 2020, the value of soybean, Brazil nut and quinoa exports, the most important food products in Bolivia’s non-traditional exports, reported a reduction of 4, 25 and 14 per cent, respectively, following a sharp drop in consumption and the fall in international prices as a result of the coronavirus pandemic.
Bolivia is currently facing the worst possible scenario for its oil revenues. Due to lower demand from Brazil and Argentina, the drop in oil prices and the effects of the coronavirus, gas export revenues will reduce in about $1.5 billion. That decline would have a net impact on the country’s economy of a loss of two points of gross national product (GNP) this year and a multiplier effect on governorships, municipalities and universities that would subtract royalty income from direct taxes on hydrocarbons.