Press Release No. <a name="P16_75"></a>03/21

The Bolivian authorities have taken prompt action to stabilize the financial system and are developing a revised 2003 budget through a consensus process. They intend to put together an economic program for 2003 that will maintain macroeconomic stability, lay the basis for a return to sustained economic growth and poverty reduction, and carry forward essential structural reforms in the banking and corporate sectors.

The authorities and IMF staff have reached agreement on a fiscal and financing framework for 2003 consistent with these objectives, and the authorities will seek congressional approval of this framework. In particular, this framework incorporates a balanced set of fiscal measures, a phased reduction in the government deficit, and greater social safety net support. We expect that a request for a stand-by arrangement based on this program can be brought very quickly to the Executive Board for consideration, and that the program would also be supported by additional financing from the international community.

The authorities plan to continue their discussions on a broader set of structural policies to be supported by the IMF through the Poverty Reduction Growth Facility (PRGF). Our joint objective is to replace the Stand-by with a PRGF as soon as possible.

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