## Press Release: IMF Completes Fourth Review Under Bolivia's Stand-By Arrangement

_IMF News, September 27, 2004_

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## Bibliographic details
- Authors: Arrangement Press Release No.
- Published: September 27, 2004

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### Program status and disbursements
- The Executive Board completed the fourth review of Bolivia's performance under a 21-month, SDR128.64 million (about US$189 million) Stand-By Arrangement originally approved on April 2, 2003.
- The arrangement was later "augmented and extented" (see Press Release No. 04/113).
- The completion of the review enables the release of SDR 26.8 million (about US$39 million) to Bolivia.
- This disbursement would bring total disbursements under the arrangement to SDR 101.84 million (about US$149 million).
- In completing the review, the Executive Board approved Bolivia's request for waivers for the nonobservance of performance criteria.

### Recent macroeconomic performance (as summarized by Agustín Carstens, Deputy Managing Director and Acting Chair)
- "Bolivia's economic performance is improving, and implementation of the authorities' economic program is broadly on track."
- Economic growth has picked up.
- The current account is in surplus.
- Inflation remains in single digits.
- The financial situation stabilized in the last two months after some deposit losses related to the introduction of the financial transactions tax.
- The affirmative outcome in the gas referendum should give the Bolivian authorities some breathing space to develop their hydrocarbons strategy.
- A national consensus on economic policies is identified as important to take the economic agenda forward.

### Fiscal policy findings and recommendations
- The authorities remain committed to achieving their fiscal target for 2004.
- They intend to continue to make progress in 2005 toward attaining fiscal sustainability while increasing infrastructure and social spending.
- Recommended policy measures include:
  - Appropriate tax reform, including a phase-out of the financial transactions tax.
  - Measures to improve tax administration.
  - Measures to curtail current spending.
  - Measures to improve public expenditure management.
- On debt sustainability: because Bolivia's debt burden is sizeable, attainment of debt sustainability will depend to a large extent on financing the budget deficit with grants and concessional financing and avoiding non-concessional borrowing.

### Financial sector measures
- Authorities are taking measures to protect and strengthen the financial system, including:
  - Strengthening financial supervision and liquidity monitoring.
  - Improving prudential norms and moving towards a risk-based supervisory framework.
  - Continuing a proactive interest rate policy in response to changes in liquidity conditions.
  - Increasing placements at longer maturities given the improved domestic bond market.

### Hydrocarbons strategy and revenue use
- An appropriate hydrocarbons' strategy is necessary to attain medium-term sustainability.
- The authorities recently submitted a hydrocarbons bill to Congress and will continue to work toward ensuring that conditions essential for development of the sector and medium-term sustainability are developed.
- The authorities are committed to ensuring the efficient and transparent use of hydrocarbons-related revenues to benefit the Bolivian people.

### Poverty Reduction Strategy and IMF engagement
- The authorities expect to complete a Poverty Reduction Strategy Paper by the end of this year, which will form the basis for the development of a medium-term economic strategy to raise Bolivian living standards.
- Broadening and consolidating the national consensus for policies to support growth and poverty reduction, including through the efficient development of Bolivia's hydrocarbon resources, will facilitate the development of such a strategy.
- "The IMF stands ready to continue to assist Bolivia after the current arrangement ends in December," Mr. Carstens said.

*Press Release: IMF Completes Fourth Review Under Bolivia's Stand-By Arrangement — September 27, 2004. International Monetary Fund.*

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## References

- [Bolivia and the IMF](http://www.imf.org/external/country/BOL/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 03/46](https://www.imf.org/external/np/sec/pr/2003/pr0346.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr04205_