Having cut the diesel subsidy in December and then once more just last month, the administration has moved to a single, universally applied diesel price indexed to global markets. Announcing the shift late Friday in a webcast, President Rodrigo Paz called it "the most responsible decision for the country," saying it should end recurring shortages and long waits at filling stations.
The IMF program lays out reforms to rein in spending and stabilize the economy, with a broader objective of eliminating all fuel subsidies by 2027. Paz was blunt about how new money can be used: "If they are lending us resources to reactivate the economy, I cannot use them to buy diesel at a high price and sell it cheaply. That has to end." He added that roughly $2.6 billion a year goes to gasoline and diesel subsidies, which he said feed smuggling and corruption.
Policy shifts remind investors to revisit their plans and protect long term goals. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.
The change takes effect right away and will be felt in household budgets, even as official data show inflation cooled to 5% in August compared with 24% a year earlier. Anticipating backlash, the government extended a state of emergency through December to try to head off protests and planned road blockades next month. To soften the blow, Paz rolled out social support that includes cash handouts and preferential financing, scrapping some import taxes, extending the tax amnesty, launching job programs, and helping local governments clean up their finances. "Subsidy or future," Paz said. "Bolivia chooses the future."
Staying steady and reassessing risk can help your savings endure uncertain times. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.
