Bolivia claims rating agency Fitch Ratings for low note

The President’s Government Luis Arce sent a notice of complaint on Wednesday to Fitch Rating after lowering the rating to less than B from bolivian due to a decrease in international reserves that, according to that international agency, has weakened the economy of the Andean country after more than a decade of stability and low inflation.

“We do not share the assessment of Fitch Rating… they did not assess that Bolivia has been able to maintain price stability at a time of volatility and international uncertainty,” declared the Minister of Economy, Marcelo Montenegro, to Unitel television.

Bolivia boasts “the lowest inflation in the region” (3.2% in 2022), has price stability and GDP growth of 4.3% in the third quarter of 2022; and those ‘strengths’ achieved after the COVID-19 pandemic have not been considered by the international agency based in New York and London”points out, in turn, the Ministry of Economy in a statement.

in his report Fitch Rating attributes the downgrade of Bolivia’s rating from stable (B) to negative (-B) to the “depletion of external liquidity reserves” of the country, which according to the rating agency increases “largely short-term uncertainty and macroeconomic risks.”

The fall in international reserves increases the “vulnerability” outside of the country, he stresses.

Fitch Ratings has lowered Bolivia’s credit rating since 2020 after the pandemic and due to the effects of the political crisis that the country went through a year earlier, but also highlighted the actions of the Arce government to overcome external economic turmoil.

In the past decade, the Bolivian economy grew at an average annual rate of 4.9% due to the high prices of raw materials and a “prudent economic policy” which allowed him to reduce extreme poverty to 11%, but after the “boom”, the country resorted to high public spending and increasing indebtedness to maintain a high growth than this year, according to the World Bank.

The government has projected growth of 4.8% of GDP for this year, although the World Bank indicated that the Andean country would grow at a rate of 3.2%.

Arce was considered the brain of that “economic miracle” as Minister of Economy for more than a decade of then President Evo Morales (2006-2019). But the president is now going through a climate of growing social conflicts aggravated by economic stagnation and a drop in export earnings, mainly natural gas, say experts.

Source: AP