Data from the Bolivian Institute of Foreign Trade (IBCE) show that imports of vehicles and automotive accessories from China fell 14% in volume and 10% in value, from $32.5 million in January 2019 to $29.1 million in the same month this year.
The Government of Bolivia announced it has closed its borders and all international flights are suspended for 14 days to combat the spread of COVID-19. The quarantine measures also include: curfews, restricted in-country travel between government departments and an order for all persons to remain in their homes 24 hours a day with an exception made for emergencies. As a result, we have temporarily closed our Bolivian operations to comply with this order. We are closely monitoring the situation and will provide regular corporate updates during this unprecedented time.
Pan American Silver Corp., which last week temporarily suspended operations at four mines in Peru, has now curtailed operations in Argentina and Bolivia also as a result of the COVID-19 pandemic, the company announced Monday. The company added that it also suspending supply deliveries and personnel transport at its San Vicente operations in Bolivia to comply with rules there that are also to be in effect until the end of the month.
The fall in the international price of WTI oil to $22.53 a barrel will cause a loss of $850.5 million in income from natural gas exports, equivalent to 2% of the Gross Domestic Product (GDP). However, in the imports of oil derivatives, a saving of $271.7 million will be generated, approximately 0.7% of the GDP. The net impact would show a drop of 1.3% of GDP. The reduction will mainly affect the income of the National Treasury and the income of the governments, municipalities and universities from the Direct Tax on Hydrocarbons (IDH) and royalties.
The Central Bank of Bolivia (BCB) designed and implemented timely and effective monetary policy measures to ensure liquidity. Among these measures is the reduction of placements of securities through open market operations, which will be deposited in financial institutions. Concerning economic measures, the BCB confirmed that the Bs 500 family bond would reach more than 1.5 million students in the primary cycle, with an injection into aggregate demand of Bs 800 million ($114.9 mn), without this constituting a problem of illiquidity for the system. The BCB ensures the stability of the exchange rate, despite the context of parity volatility Latinamerica.
Restrictions on movement on the Covid-19 have caused flights to be reduced by 70%, and as a result, the Bolivian Airport Services Corporation (Sabsa) has stopped receiving Bs 1.4 million ($201,149) in just 19 days. The institution expects the situation to worsen and its income to fall by more than 50%.
Chile’s Terminal Puerto de Arica (TPA), through which 1.6 million tons of imported goods from overseas arrived in Bolivia in 2019, activated as of this week the sanitary protocols to prevent the spread of Covid-19, with the installation of several control barriers. It will not affect the movement of cargo.
CAF, the Latin American development bank, has made available to its member countries a “fast-disbursing emergency credit line” of up to US$2.5 billion to take action against the coronavirus pandemic. It consists of a contingent credit line of up to $50 million per country, for direct public health care. Authorities also have non-reimbursable technical cooperation resources of up to $400,000 per country for initiatives related to coronavirus pandemic emergencies.
Small gastronomic establishments reduced 50% of their staff, income fell to 10%, and the average number of establishments closed was 221 in a month. The business sector supports the measures established by the Government but also demands that all of the economic activities, especially small businesses, receive the necessary support to face the coming financial crisis.
Oil prices continue to fall and today the WTI barrel, the benchmark for Bolivia, reached its lowest rate in 17 years at $22.67. Bolivia calculated the General State Budget (GSB) for 2020 with a reference price of $59.87 a barrel of oil. So far, there is a decrease of $37.2 (62%), which will mean a drop in the country’s income from gas exports to Argentina and Brazil.