The National Chamber of Commerce (CNC) warned that some 100,000 jobs in Bolivia are at risk and that 20% of companies could close operations due to the illiquidity generated by the Covid-19 quarantine. The quarantine left at least $300 million of losses in the sector.
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Due to the quarantine, the implementation of teleworking and tele-education, internet consumption in Bolivia rose by 40%. In the country, the telephone companies currently have more than 10 million users, of which between 80% and 85% are postpaid customers and the rest are prepaid customers (mainly cell phones). These users have increased internet consumption by 40%, reported the president of the Bolivian Telecommunications Chamber (Catelbo), Eduardo Trigo.
Those who owe less than Bs.1 million ($144,882) to the banks will be able to defer their June, July and August quotas, Development Minister Oscar Ortiz said. People who owe less than one million Bolivians represent the vast majority of people who owe to banks. This is the second time that bank loans are deferred, as payments from March, April and May were previously deferred.
Remittances to Latin America and the Caribbean have plunged as a result of the Covid-19 health crisis and global economic recession. The region will receive a projected $77.5 billion in remittances this year, 19.3% less than the $96 billion it received in 2019, according to provisional forecasts by the World Bank.
The Bolivian government has delayed the deadline for filing corporate income taxes by two months for all but the largest businesses. The tax had previously been delayed for all companies from March 30 to May 29. The new deadline is July 31. The extensions applies to 80% of companies.
Two months after the quarantine, only three out of 10 cargo trucks are operating in Bolivia. The International Transport Association (Asociaatrin) points out that due to the quarantine there is a lower volume of transport in key sectors such as soy derivatives, mining, and construction. Marcelo Cruz, president of Asociatrin, indicated that in the oilseed sector the volume of cargo contracted by 50%.
According to Bolivia’s Financial Authority (ASFI), bank profits fell by up to 11% from $66.2 million in the first quarter of 2019 to $58.7 million in the same period in 2020. According to the Association of Banks of Bolivia (Asoban) the health of the banks is stable, despite the fall. Asoban’s executive director, Nelson Villalobos, said that until April 2020 deposits registered an annual growth of 7.2 %. As for the loan portfolio, it grew 4.9%
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The paralysis of the economy, the slow reactivation and the lack of closing of the financial statements of the companies, force the business sector to request a deferment of the payment of the Profit Tax, which is fulfilled this May 29, until October or at least to delay 60 days. The National Chamber of Commerce (CNC-Bolivia) and the National Chamber of Industries (CNI), in a joint statement, said that due to the paralysis of most economic activities during the quarantine, companies have been unable to generate sufficient income to meet their obligations.
From January to March of this year, the Bolivian economy has been slowing down to grow only 0.55%, according to the Global Index of Economic Activity (IGAE). The economic activities that affected the low growth were mining, construction, transportation and storage, other industries and financial services. The other sectors registered an expansion, although below 5%.