Bolivian government continues subsidy policy for food, fuel, and energy to maintain stability, says deputy Minister

The Bolivian government will maintain its policy of subsidizing food, fuel, and energy with the aim of preserving economic stability and preventing runaway inflation, said Zenón Mamani, Bolivia’s Deputy Minister of Budget and Fiscal Accounting, on Friday.

The Deputy Minister told Xinhua that Bolivia maintains the Social Community Productive Economic Model intended to preserve stability.

“We have an economic model in the country that takes care of precisely this: stability,” Mamani said, reiterating that “we will maintain this subsidy policy.”

According to Mamani, the subsidy policy for foods such as soy and corn, in addition to fuels like diesel, gasoline, and domestic gas, contributes to maintaining the economy with stable indicators.

When asked whether the subsidy would create a larger fiscal deficit, the Deputy Minister stated that the resources used are already accounted for in the budget to prevent adverse impacts on the Bolivian economy.

“This financing by the State allows the population to pay a certain price for fuel consumption without spending more resources than they would if prices were aligned with international rates,” Mamani noted.

According to the Deputy Minister, the subsidy policy enables the country to keep inflation under control, unlike other nations whose economies have been affected by the conflict in Eastern Europe.

“This stability is reflected in inflation,” Mamani explained after the Consumer Price Index (CPI) increased by 0.57 percent in May this year compared to April.

The Social Community Productive Economic Model was initially implemented from 2006 to 2019 and was reactivated in November 2020 under the current administration of President Luis Arce.

Bolivia’s economy grew by 6.1 percent in 2021 and 3.5 percent in 2022, and it is projected to grow by 4.86 percent in 2023.

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