MercoPress. South Atlantic News Agency

IMF tips inaccurate, Bolivia says

The Bolivian Government is taking care of the economy, Montenegro claimed

The Government of Bolivia stressed Monday that the International Monetary Fund's (IMF) devaluation and fiscal adjustment proposals were missing the target because they hinged on old data.

Bolivia's economic situation “will likely require both a gradual fiscal adjustment over the next few years and an initial devaluation to more quickly address the external imbalance and allow for the accumulation of international reserves” and correct the country's external imbalance, an IMF report noted while outlining the country's low reserves amid growing fiscal deficit and pressure on foreign exchange markets.

Hence, the IMF suggested a twitch to the current economic policies to avoid a disorderly adjustment, which could have serious social and economic repercussions. But Economy
Minister Marcelo Montenegro claimed that the IMF's analysis was based on 2023 data.

”That 2024 IMF report, (Article IV Consultation), is using 2023 figures, therefore, many of its observations are lagging. However, in 2024 we have generated more growth than what their projections say and carried out actions with the Bolivian businessman that have been fulfilled, such as opening to exports and the return of the Tax Refund Certificates (Cedeim), to boost exports,“ Montenegro underlined.

The IMF's Article IV Consultation is an economic analysis that evaluates each country's economic policies of and compares them with global growth targets.

Montenegro added that the IMF plans such as
opening to exports and boost sales abroad have already been undertaken. Bolivia even carried out many actions that even exceed those recommendations pointed out in the IMF document, Montenegro insisted.

The official also said his country's default rate stood at 3.2%, below the regional average of 3.4%. ”It cannot be said that things have not been done to improve the financial system, and no one can say that we have destroyed the economy, not at all, in any case what these numbers show is that the Government is taking care of the economy (...),“ he argued while pointing fingers at the external gap dating back decades.

Montenegro also said he believed that these problems ”will go away” through import substitution and industrialization, although it would not happen overnight. He also highlighted that between 2021 and 2024 under President Luis Arce Catacora
profits grew by 29.5% on average.