Page Seven / La Paz
In one year, credits from the Central Bank of Bolivia (BCB) to the General Treasury of the Nation (BCB) increased by 38.8% and reached 47,803 million bolivianos in 2021, according to figures included in the Monetary Policy Report (IPM) of January of the issuing entity.
Experts warn that domestic debt in general is rising dangerously.
The BCB reported that the balance of the TGN’s debt with the issuing entity as of December 2020 was 34,432 million bolivianos and in 2021 it rose to 47,803 million (check the table).
The issuing entity explains that in 2021 the TGN requested liquidity credits from the entity to be used in a circumscribed manner to the Financial Fiscal Program, to meet obligations contracted in 2020 due to “deficient management of the transitory Government”.
It indicates that an extraordinary loan was granted under “advantageous financial conditions” for the TGN in order to reduce the risk of refinancing the public debt portfolio inherited from the previous administration.
The BCB specified that for the liquidity credit, four disbursements were made for a total of 16,500 million bolivianos, less than the amount foreseen in the 2021 Financial Fiscal Program.
An extraordinary credit was also contracted for 15,107 million bolivianos with three disbursements in the management for 12,287 million bolivianos.
For the BCB, this improved the TGN’s debt structure in terms of a long maturity and low interest rates.
On the other hand, Law 1356 of the PGE authorized the BCB, exceptionally and only once, to make a non-reimbursable inter-institutional transfer to the TGN for an amount of 350 million bolivianos.
The BCB maintains that these resources are committed to the creation of trusts for the Reactivation and Development of the National Industry with Import Substitution (SI Bolivia Program).
Juan Antonio Morales, former president of the BCB, believed that these credits increased very strongly, but it is possible that they had been contracted to refinance the 2020 loans.
He added that these resources have a maturity of one year. “They are liquidity credits to finance current government expenses, salaries. Sometimes they serve to establish a bridge between external credits that are expected to be disbursed and immediate expenses”, the expert specified.
For Morales, the internal debt is at high levels and difficulties may arise due to the external context that will have repercussions.
“The price of oil is high, but gas production fell. Tin prices are high, but taxation is low. If the Government emphasizes the proper functioning of internal taxes, it can benefit from this price increase, which would relieve pressure on the deficit and public debt that is at high levels, “he said.
Economist Juan Pablo Suárez pointed out that in 2020 several funds were created and BCB financing increased.
In general, he commented that the public debt is already close to 50% of GDP and that is not a good indicator.
The economist Fernando Romero was of the opinion that internal debt operations are common in all countries; however, the use of these liabilities will be positive or negative depending on whether these resources are used to cover public spending or investment.
That is why he said that the Government should report in detail on the use, destination and results of these loans, which in the end must be repaid like any other credit.
“Any disproportionate and irrational increase in the national public debt can bring about significant imbalances in national finances, the social cost of which will undoubtedly be borne by the population,” he warned.
The projections of the BCB
For this year, the BCB projected a growth of 5.1% of the Gross Domestic Product (GDP) and an inflation of 3.3%, according to the Monetary Policy Report (IPM) of January this year.
The president of the issuing entity, Edwin Rojas, highlighted in the press conference on Tuesday, March 8, that the exchange rate policy is stable, that it will continue to contribute to the recovery of economic activity and in this way will cause inflation levels to Keep it low and under control.
In this new edition of the WPI, the international scenario is described, which was characterized by levels of uncertainty still high due to the pandemic, with the resurgence of global inflation, the event that determined the beginning of the withdrawal of monetary stimuli in most of the economies.
Global domestic debt grew by Bs 24,214 million in 2021
- Passives • According to data from the Vice Ministry of the Treasury, the internal debt of the TGN as of December 31 of last year went from a balance of Bs 71,039.2 million in 2020 to Bs 95,253.2 million in the last administration.
- public • The internal debt of the financial public sector increased in the analysis period from Bs 41,824 million in 2020 to Bs 55,195.8 million.
- private • The internal debt with the private sector increased from 29,214.3 million bolivianos in 2020 to 40,056.6 million bolivianos, official government figures reveal.
- State • According to the BCB’s Monetary Policy Report, the entity’s loans to public companies increased from Bs 36,251 million in 2020 to Bs 36,505 million in 2021. Last year Bs 770 million were disbursed to ENDE and two million bolivianos to YPFB for the Urea Plant project.
- Return • According to the BCB, last year the TGN made amortizations of Bs 15,415 million for cable car loans, 2008 emergency loans and others. In addition, interest was paid for Bs 195 million (see table).
- Analysis • The economist Fernando Romero indicated that there must be a strict evaluation and monitoring of the credits granted to state companies. These companies after several years should be autonomous, generate their own income, pay debts and seek external financing from the state, that is, be “self-sufficient.”
