RIO DE JANEIRO, BRAZIL – Since the 2020 election campaign, Arce pledged the people that he would work tirelessly to rebuild the economy, tackle the pandemic and recover democracy, and along these lines he is closing his first year in office with Gross Domestic Product (GDP) growth projections of over 5%, higher than the 4.4% initially forecast by the Ministry of Economy.
President Arce compared the progress in the year that is ending with the Bolivia that “languished” under the coup government of Jeanine Áñez (2019-2020), when GDP shrank 8.8% and posted its first negative figure in over 50 years.
The slump in the indicator was marked by the pandemic, but exacerbated by the mismanagement of the de facto administration after the coup d’état against then president Evo Morales, the president emphasized.
The Executive counts among the negative impacts of the Añez administration the suspension of public investment, the privatization of strategic sectors, corruption, theft of state coffers and the country’s indebtedness to international financial institutions, among other issues.
In an effort to reverse this situation, Arce’s administration, a little over half a year in power, was registering positive economic indicators according to official data, with emphasis on the recovery of the hydrocarbons sector.
Millionaire sums were allocated to public investment, particularly to the development of infrastructure, which provides for the creation of thousands of jobs as an added value; lithium exploitation was also encouraged, the country exponentially increased its international reserves and boosted national quality production to promote exports and replace imports.
GROWTH IN THE FIRST MONTHS
The main economic rebound in the first months of the year occurred in the construction sector, with 32% growth in May, reflected in the increase in iron imports and cement production, according to the Ministry of Industry’s report.
From January through April, economic activity in the country grew by 5.3%, influenced by the increase in mining (34.2%), construction (17.9%), hydrocarbons (10%) and manufacturing (9.6%), among the main sectors.
Likewise, turnover in restaurants, hotels, supermarkets and air passenger flow grew in the first months of this year, whereas in the same period in 2020 they were paralyzed due to a strict quarantine imposed by Covid-19.
In addition, new company incorporations grew by 71% from January through June, and public investment increased by 111% compared to the same period last year, according to figures disclosed by Minister of Economy Marcelo Montenegro.
Other noteworthy aspects of this economic rebound are the payment of loans rescheduled due to the pandemic, which reached US$3.941 billion by the end of June, in addition to tax collections, which reached US$3.588 billion that month, 26% more than the previous year.
In the first half of 2021, the country faced two other peaks of Covid-19 infections, in which the Government chose to maintain the dynamics of the economy, avoided restrictions and accelerated vaccination to reactivate growth.
It also implemented supply and demand measures to encourage the sector, such as the “Bono Contra el Hambre” (Fund against Hunger), the “SíBolivia” credit and the Value Added Tax Cash Rebate Regime.
ECONOMIC RECOVERY
Nearing the end of December, economic growth is reflected in sectors such as mining (53%), transport and storage (35.4%), construction (35.3%), hydrocarbons (17.2%), electricity, gas and water (9.9%), trade (9.7%), and industry and manufacturing (9.0%).
Through October, the Bolivian trade balance posted an accumulated surplus of US$1.584 billion, in contrast to the same period in 2020, when there was a deficit of US$159 million, according to the National Statistics Institute (INE).
Total exports that month posted an increase of 64% and reached US$9.8 billion, more than US$3 billion higher than in the same period last year.
Up to the tenth month of this year, accumulated inflation in the country stood at 0.54%, the lowest among Latin American countries, according to data from the Bolivian Institute of Foreign Trade.
The country is experiencing a recovery in its trade balance, and imports through October increased by 31%.
On the other hand, by last September, Bolivia recorded an accumulated surplus of US$1.5 billion, highlighted by the Ministry of Economy as the best performance in 7 years and evidence of the progress of Arce’s reactivation plan.
Since the beginning of his administration in November 2020, and given the need to increase hydrocarbon reserves, the Executive outlined an intensive exploration plan aimed at reactivating numerous delayed projects with great prospectivity, which are now in full execution.
This key sector in the country’s development comprises 19 exploratory projects (in 7 of the 9 departments) aimed at discovering 5 trillion cubic feet of natural gas with an approximate investment of US$1.55 billion over the next 4 years.
Summarizing his first year in office, the president stated that the measures implemented produced positive results after a crisis which in 2020, with the de facto government, hit rock bottom.