Bolivia’s next government will inherit a country with an external debt of $10.7 billion, one of the highest recorded in the last decade, it will also receive one of the highest deficits in the region, above 8% of Gross Domestic Product (GDP) and a sharp fall of international reserves.
The Government ruled out to lift the fuel subsidy in the country. On the contrary, it noted that new State policies are being studied to eliminate fuel imports and replace them with local production of biofuels.
Bolivia’s gas revenues have reduced by 58% from 2013 to 2019, according to data from the Ministry of Economy. En 2013, revenues reached $3.5billion while by 2019 the will be around $1.5billion. Economists identify several causes for the drop: from the fluctuation of oil prices to a fall in natural gas production and the reduction of the demand in the main export markets (Brazil and Argentina).
The leader of the National Industry Chamber, Ibo Blazicevic, expressed his concern about the future governability in Bolivia. He said that whoever wins the General Elections on October 20, will not have the control of the Congress, making it more challenging to govern the country. He also said that external developments such as the trade war between the United States and China, and the Argentine crisis harm the economy. He added that urgent adjustments are needed.
The Russian company Acron and Bolivian State-owned YPFB signed an agreement to sell natural gas and form a company for the commercialization of Urea in Brazil.
The agreement calls for the sale of 2.2 million cubic meters per day (MMmcd) of Bolivian natural gas to Acron from 2021, for a period of 20 years. The agreement also specifies the creation of a joint venture for the commercialization of urea of the Bulo Bulo (Bolivia) and Tres Lagunas (Brazil) plants.
The International Monetary Fund (IMF) lowered its forecast for Bolivian Gross Domestic Product (GDP) growth from 4% to 3.9%. Despite this adjustment, according to the Ministry of Economy, “Bolivia will have the highest growth in the region”. For this year, the Bolivian Government projected a GDP of 4.5%. The IMF also forecasted that Bolivia´s consumer price index (CPI) will end this year in 1.7% and the current account deficit will be of 5%.
After the Directorate General of Civil Aeronautics (DGAC) temporarily suspended Bolivian Aviation Operations (BOA) of its eight classic Boeing CL 737 aircrafts in El Alto International Airport, the state-owned company will upgrade these planes to a 737 Next Generation (NG) version from the same manufacturer. The first plane is expected to arrive later this month and the second in November. The following six are expected to arrive in 2020.
José Luis Parada, the economic advisor of the Regional Government of Santa Cruz, said that the profits of Bolivian Fiscal Oilfields (YPFB) suffered a shocking drop due to the mismanagement of resources.
Potosí, Oruro and Tarija are preparing popular demonstrations for 16th of October. The Ombudsman’s and the Catholic Church urges the population to avoid confrontations such as those that took place in Potosí during the weekend.
During this electoral year, only the Ministry of Communication had $84.2 million allocated. If there is a second round, the Ministry will have more than $23.2 million.