Page Seven / La Paz
The Government announced that this year the economy will close with a growth rate of 5% and with a lower fiscal deficit and unemployment than the previous year. Analysts say that this is due to a rebound effect and higher tax pressure and low execution of public investment.
The Minister of Economy, Marcelo Montenegro, during the Final Public Accountability 2021, reported on the measures that allowed progress in the recovery of economic activity.
For this year in the Financial Fiscal Program signed with the Central Bank of Bolivia (BCB) the Government projected a growth rate of 4.4%.
“In the present management we hope to end with a growth rate equal to or greater than 5%, in the Financial Fiscal Program we estimate 4.4%, other international organizations give us higher rates, but we have been conservative in the projection and we hope to conclude with that growth ”, specified Montenegro.
To achieve recovery or what the Government calls reconstruction of the economy, the authority stressed that on the demand side, several measures were implemented.
For example, the return of contributions from the AFPs that allowed the withdrawal of 1,005 million bolivianos from 288,594 affiliates. This number represents 24% of those qualified.
There is also the Bond Against Hunger that paid 4,036 million bolivianos to four million beneficiaries, the increase in the minimum wage by 2%; creation of items in health and education.
The Public Investment Fund of 1,500 million bolivianos was put into effect, the Trust to Support the Reactivation of Public Investment of 2,000 million bolivianos, the VAT Refund that allowed to return 24.6 million bolivianos to October and the Tax on the Great Fortunes that raised 240 million to July.
There is also the execution of public investment that reached 1,910 million dollars in October, less than half of the budget of 4,011 million dollars planned this year.
On the supply side, the low-cost housing loan portfolio increased by 6% to $ 4,204 million and productive loans by 6% to $ 13,144 million.
Loans for US $ 5,969 million were refinanced and rescheduled and the Guarantee Fund for the Development of the National Fogadin Industry was established with 150 million Bolivians, among other measures.
Fiscal deficit
Montenegro reported that as of June the fiscal deficit was reduced to 1.4% after in 2020 it reached 12.7% of GDP.
According to the authority, this is a reflection of the responsible management of public finances and savings to allocate resources to public investment. Part of this result is the product of the collection of taxes that grew by 14% this year and which as of November reached 44,203 million Bolivians.
Unemployment
The urban open unemployment rate as of October, according to data presented by the Ministry of the Economy, is 5.2% as a result of the recovery of the economy and the generation of more employment.
Montenegro indicated that between May 2020 and October this year, 1.1 million additional jobs were recovered.
As of November 2019, the employed population was 3.7 million people and in May 2020 that number dropped to 3.1 million and in October of this year it stands at 4.2 million. The population employed in the manufacturing industry rose 26% in one year and reached 620,469 people in October; in accommodation and meals it increased by 38% to 428,155 people.
In the professional and technical services sector it grew by 46% and reached 126,521 workers and in other activities and services the increase was 34% to 148,503 people.
The unemployment rate for the population aged 16 to 28 is 7.5%, compared to the rate of 14.7% a year ago in October.
Analysis
Financial analyst Jaime Dunn opined that the reduction of the fiscal deficit to 1.4% as of June that the Government mentions may respond to the low execution of public investment, which allowed to save money.
“1.4% is a very low percentage, but it may be due to an increase in income and lower spending, which includes public investment, but this will accelerate at the end of the year and then the deficit grows again,” he said.
Regarding the economic growth of 5% that is expected is due to a rebound effect, but this depends on the investment.
The economist Alberto Bonadona opined that any level of growth this year is justified compared to a year as bad as 2020 was.
Regarding the reduction of the fiscal deficit, he said that this is possible due to the increase in collections as a result of the higher tax pressure.
“There is an important growth in the collection and this makes the fiscal deficit go down. There was a tough inspection of taxpayers ”, he stressed.
Regarding unemployment, Bonadona said that with the pandemic there was a loss of more than a million formal jobs and half a million formal ones.
“It is difficult to be certain about the unemployment reduction rate and about the creation of new jobs because you have to look at quality, there is a lot of precariousness and underemployment. At one point, jobs were closed, there was a forced vacation and now they have been reopened ”, he clarified
Sales increase in restaurants, hotels and air transport
For example, the billing of restaurants in October reached 383 million dollars, 39% more than a year ago in the same period.
Sales of air transport reached 205 million dollars, 49% more, and hotels 61 million dollars, 38% more.
Exports increased by 65% from 5,396 million dollars registered in October 2020 to 8,926 million dollars in the same period of 2021, with a strong boost from the manufacturing industry.
The trade balance recovered from a deficit of $ 159 million in October 2020 to a surplus of $ 1,584 million as of October 2021.
The population’s savings in the financial system increased by 8% and the gross loan placement portfolio 4% as of October 2021, highlighted Minister Montenegro.
The authority also highlighted the implementation of other measures such as the acquisition of four million tests for the early diagnosis of Covid-19; the purchase of 21.5 million vaccines as of December 13 and six million more doses to arrive in the country.
9.7 million doses of the vaccine were administered.
