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Economic Survey of Latin America and the Caribbean 2007-2008

Macroeconomic Policy and Volatility

image of Economic Survey of Latin America and the Caribbean 2007-2008

The Economic Survey is one of ECLAC's flagship publications, and has been issued since 1948. This new edition covers the region's economic performance in 2007 and the first semester of 2008, and suggests growth estimates for this year.

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Bolivia

In recent years, the Bolivian economy has been boosted by the rising prices of some its export commodities. The terms of trade soared by 42.6% between 2002 and 2007. Beginning in 2004, the balance of trade in goods began to show positive results, and it swelled considerably in the last two years, climbing by 177% over the previous biennium. In addition to the substantial improvement in the trade balance, the external debt fell by 55% between 2005 and 2007 thanks to debt forgiveness in the framework of the enhanced Highly Indebted Poor Countries Debt Initiative (HIPC II) and an increase in private current transfers, mostly remittances from migrant workers; in 2006-2007, these shot up by 422% compared with the average for the previous five years. All the above was reflected in sizeable balance-of payments surpluses, and these in turn generated an unprecedented rise in net international reserves in the hands of the central bank, which increased by 521% from 2002 to 2007. In 2007 Bolivia posted positive results in terms of economic growth (4.56%), non-financial public sector surplus (1.8% of GDP), balance-of-payments surplus (US$ 1.952 billion) and a growing accumulation of international reserves, whose growth was US$ 437 million higher in 2007 than in 2006.

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