Bolivia manages to lower fiscal deficit from 12.7% to 7.2% in two years and consolidates economic recovery

Bolivia’s fiscal deficit was reduced from 12.7 percent in 2020 to 7.2 percent of the Gross Domestic Product in 2022.

This, together with economic growth of 4.3 percent during the third quarter of 2022 and controlled inflation at 3.12 percent, evidences the country’s economic recovery despite the adverse international context, the Government highlighted.

During a press conference on the evaluation of the macroeconomic situation, the Minister of Economy and Public Finances, Marcelo Montenegro, highlighted on Monday the positive GDP growth, low inflation, reduction of the fiscal deficit, a 20 percent increase in tax collection, a decrease in the unemployment rate and a poverty reduction.

According to the minister, these indicators show that the Bolivian economy is in an adequate process of reconstruction after “three hard blows”, among which he referred to the poor economic management of the interim Government of Jeanine Áñez (2019-2020), the COVID-19 pandemic and the adverse effects of the war in Europe.

The 2022 fiscal deficit of 7.2 percent is well below the initial target of 8.5, Montenegro specified.

During the previous interim Government administration, the minister recalled that the fiscal deficit rose to 12.7 percent in 2020.

However, in 2021, it was reduced to 9.3 percent. And, despite an “unfavorable, turbulent, uncertain and highly volatile” environment, the fiscal deficit fell by more than two percentage points in 2022.

Montenegro stated that these data show the responsible work of the Government in managing the economy. And he commented that economic growth responds mainly to the impulse of the transportation, electric, agricultural, construction, financial, and industrial manufacturing sectors, among others.

The control of inflation, with a slight growth of 0.3 percent in January of this year, has stabilized energy and basic food prices.

Montenegro also praised the stability shown by the exchange rate over the last decade.

And he celebrated that Bolivia has one of the lowest unemployment rates in the region, currently at 4.1 percent.

Finally, he revealed that more than two percentage points reduced the extreme poverty rate to 11.1 percent in 2021.

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