Bolivian bonds tumbled on Tuesday after President-elect Luis Arce from the left-wing Movimiento al Socialismo (MAS) party claimed victory in this week's election. Analysts and investors are hopeful that the next government will implement pragmatic policies to ensure economic stability. The country's non-financial public sector debt was 58% of GDP at the end of 2019, and it expects to reach 66% in 2021, the International Monetary Fund (IMF) said in April. Bolivia owes most of its debt to multilateral institutions, but it also has $2 billion in outstanding principal in the international bond market. Bolivia's US dollar-denominated debt was down in Tuesday's action. The benchmark 4.5% 2028 issue dropped four points in price to bid 81.875, putting the yield at 8.2%, according to data provider Refinitiv.
At least 5,000 small sugarcane growers in Santa Cruz at risk of disappearing and losing their patrimony, land, agricultural machinery and other material goods seized, as collateral, in entities of the financial system. Till September, 72% of the harvest advanced. Over-supply and price competition in the local market have caused the values to fall between 110 and 120 Bs per quintal ($15.78 - $17.21). The sector proposes to the government to export 30% of the processed sugar production in 2020 and to comply with the agreed commitments to purchase ethanol through the state-owned YPFB.
The aftermath of the pandemic continues in Bolivia. Figures from the latest report from the National Institute of Statistics (INE) reveal that exports fell by up to 29% through September. The numbers show a fall in imports of 33%, and a trade deficit of $127 million, the highest of the year, with hydrocarbon and mineral exports falling.
Housing credit grew by 7.1%, according to data from the Financial System Supervisory Authority (ASFI). Up to August, loans for the purchase of homes went from Bs 24.92 billion ($ 3.57 bn) in 2019, to Bs 26.7 billion ($ 11.77 bn). Eighty-two thousand sixty-two families were benefited, which represents a growth of 6.3%. Non-performing loans remained at 1.3%,
Active forest fires in Bolivia are down by at least 50% from last week. Santa Cruz, with 34 active fires, continues to be the most affected region, followed by Chuquisaca where five fires persist. La Paz and Beni have one. The area affected by the fire exceeds 1.8 million hectares. The Government of Santa Cruz updated the data and mentioned that there are 36 active fires, and seven of these are reactivations.
The construction and mineral sectors were the most affected by the Covid-19 pandemic in the first half of this year, falling by 50.95% and 38.56% respectively. The National Institute of Statistics indicated that the only sectors that grew were communication (6.14%) due to the increase in the use of the internet, and agriculture (1.53%) due to the good behavior of livestock and non-industrial agricultural activity.
Bank arrears as of August 31, 2020 reached $469 billion, exceeding the arrears registered in 2019, according to the National Banks Association (ASOBAN). This default is a consequence of the impact of Covid-19 on the country. ASOBAN also reported that the number of accounts up to August 2020 reached 11,175,468.
Loans to the productive sector increased by 5% between August 2019 and August this year, according to the Financial System Supervisory Authority (ASFI). Loans in August reached Bs.83.99 billion ($12.19 billion), BS.4.04 billion ($587.45 million) more than in the same period in 2019. The manufacturing industry received 36.1% of the loans, followed by the construction sector (25%), agriculture and livestock (24.2%) and tourism (8.4%).
The Huanuni Mining Company (EMH) has a deficit of at least $15 million, as a result of the paralysis of production for two months due to the coronavirus pandemic, and the impossibility of marketing its tin concentrates freely. The mining company can only sell to the state-owned Metalúrgica de Vinto, which also has financial problems.
The oversupply of sugar and price competition in the local market brought down sugar prices, currently at Bs.110-120 ($15.96 - $17.41) per quintal. This situation has put at least 5,000 small sugarcane growers in Santa Cruz at risk of disappearing and losing their patrimony. Sugarcane producers have proposed the Government to allow 30% of this year's production to be exported in order to alleviate the situation.