Information regarding Bolivia’s productive sector and the country’s macroeconomy.
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.
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.
The Government has made more than 7,105,921 million bond payments, reaching a large part of the 8.3 million beneficiaries. The breakdown of disbursements is as follows: 1,744,763 from the Renta Dignidad bond; 931,525 from the Bono Canasta Familiar; 2,433,489 from the Bono Familia and 1,906,891 from the Bono Universal.
The Center of Studies for Labor and Agricultural Development (CEDLA) anticipates that this year industry and manufacturing, construction, tourism, hotels, mining and hydrocarbons and public administration, will be the economic activities that will generate more unemployment due to the sharp contraction they will experience during 2020. The informal sector will continue to be the cushion of the employment crisis. The National Chamber of Commerce estimates an increase of 200,000 unemployed.
We estimate that weak domestic activity will combine with a souring external environment and contribute to a real GDP contraction of about 3.5% this year, and expect growth to recover to about 2.9% in 2021. The economic recession will weaken public finances and widen the fiscal deficit to nearly 13% of GDP this year, while, lower hydrocarbon exports will drive the country’s current account deficit to 4.5% of GDP by year-end. As Bolivia’s fiscal and external accounts deteriorate, its fiscal savings and foreign exchange reserve buffers will erode, further diminishing two key pillars of strength in the sovereign’s credit profile. New administration will face rising political, liquidity and exchange rate risks.
Poverty in Bolivia will increase by at least 2.1% as a result of the coronavirus crisis, while extreme poverty will increase by 1.7%, according to ECLAC projections.
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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