Bolivian government launches economic reconstruction policy

RIO DE JANEIRO, BRAZIL – On March 31, the Bolivian government announced the launching of an economic reconstruction program to maintain the sustained growth rates of 2021 in several sectors after hard years of economic contraction.

The Minister of Economy, Marcelo Montenegro, said that after the Covid-19 pandemic, domestic investment levels, the boost to domestic demand and economic growth have been restored.

“In 2021, the effort was made to have an investment level of more than US$2.6 billion, when in 2020, US$1.8 billion had been requested,” he said.

During the de facto government in 2019-2020, the economy suffered a huge drop, as from a sustained growth of 4.5% in previous years, it decreased to -11%.

According to Montenegro, there are no rebound effects that would allow the economy to recover on its own. “It is important the role of economic policy, of the incentives given by the State to the private sector, of the elements of resource injection,” he argued.

President Luis Arce assured that they foresee the country’s growth this year to be around 5%. “We are seeing an improvement in the fiscal figures and foreign trade figures that we were worried about,” he said.

Arce added that for many years, before the coup, there were negative figures in the trade balance and highlighted that from having US$500 million deficits in the trade balance in 2020, they already have a positive balance of US$1.5 billion in 2021.

According to the Government, the success of the economic model is based on the permanent injection of money into the economy to promote consumption. It includes the delivery of bonds to less favored sectors, taxes on large fortunes, credit lines with low interest rates to productive sectors, housing programs, pension improvements, and a high state investment that in 2022 has programmed some US$2.6 billion.

Official data put the Bolivian economy’s growth at 6.11 percent in 2021, after suffering the largest contraction in its history. All economic activities performed positively, although mining, construction, services, and trade stood out the most.

“It is an indicator that reflects that we have returned to the path of economic growth,” said the Minister of Development Planning, Gabriela Mendoza.