Category: Macroeconomy/Finance

Information regarding Bolivia’s productive sector and the country’s macroeconomy.

Government defers payment of credits for those who owe less than $144,882

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.

Seven economic sectors will generate unemployment

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.

Moodys: Bolivia (B1 negative) estimations

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.

Bank profits fell 11% in Q1, but up to April deposits grew 7.2% and loans 4.9%.

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%