DESCARGAR
The most relevant feature of the first half of this year was the recovery of prices for raw material exports of Bolivia. Mining prices rose at 56.4 percent in the first quarter, while natural gas prices increased in the January-June period by almost 10 percent. This allowed, even with slight increases in volume, a higher value for traditional exports.  Although the value of non-traditional exports showed a small increase, this was entirely due to higher prices. Even though the value of imports also increased (20.5 percent), this was mainly explained by the rise in intermediate goods, largely due to an increased fuel import value.

The higher export value and gas revenues have improved the fiscal accounts, which closed the semester with a surplus of Bs. 1900.0 million (about US$ 270.0 million) Unfortunately, there is little information on the evolution of the fiscal sector for the first half of this year.

The improvement in the external sector and the demand boost driven by monetary policy (and probably fiscal policy), have increased the total demand for goods and services. This was up 3.3 percent due to the increased external demand and 2.5 percent because of increased consumption of households.

The first semester GDP expansion responds to an increased foreign demand but also internal pulling forces. A demand-driven increase has been possible thanks to a more dynamic external sector (which has allowed an increase in export values) and higher capacity utilization in the economy. However, the shortage of investment, mainly private (foreign and national) generates uncertainty about the future.
 
Economic policy has allowed the transfer of higher international prices to higher domestic consumption. This was achieved with an expansionary monetary policy and the imposition of limits on investments abroad by local banks. Lending interest rates fell to encourage domestic consumption. It should be mentioned, however, that monetary policy has little impact and must follow external conditions. This is particularly true when nominal exchange rates are fixed.

Finally, low investment combined with an increased demand for goods tend to generate incremental pressures in certain sectors of the economy. Such is the case of energy and fuels. A growing demand for liquids (diesel and gasoline) and Liquefied Gas of Petroleum combined with a reduced domestic production, due to low investment and depletion of fields, has conducted to a record value on imports of liquids. On the other hand, the growing local demand of natural gas, in the long run, may create serious trade offs. On the one hand, the pricing policy for gas consumed internally discourages investments postponing required additional production. On the other hand, gas that otherwise could be assigned to the export market, will have to be directed to local consumption. The result could be lower fiscal revenues and lower flows of reserves. That is, lower margins in monetary and fiscal policies to promote growth.

Milenio Report on the Bolivian Economy First Semester 2010, Nº 29 (842.05 kB)