Bolivia’s accumulated inflation for 2021 is just 0.54%, says a new report by the Bolivian Institute for Foreign Trade (IBCE), a private research center. Meanwhile, the regional average, according to the IMF, has reached 9.3% across Latin America.
Bolivia’s 0.54% is in stark contrast to Central Bank figures of its neighbors, such as Chile (6.5%), Argentina (41.8%), Brazil (8.24%), Peru (5.23%), and Paraguay (6.23%).
The report found that the sector with the highest inflation was private education (5.8%), but that food and drink costs were up just 0.59% during 2021. Public transport is up 0.39%. The city with the highest inflation was Cobija with a record of 4.12%, followed by Trinidad 0.92%, Santa Cruz 0.88%, La Paz 0.57%, and Cochabamba with 0.3%.
President Luis Arce is an economist by profession whose area of expertise is monetary policy, a class he taught at the Universidad Mayor de San Andrés (UMSA) in La Paz, the country’s leading public university.
Since the return of democracy in November 2020, President Arce has focused on supply-side measures such as infrastructure spending and the reactivation of state companies such as the fertilizer plant in Bulo Bulo, food processing plants across the country, and EMAPA which guarantees supply chains in the production of basic foodstuffs.
Last month, when markets announced a rise in the price of beef, EMAPA responded by announcing that they would begin selling beef at a “fair price” which prompted a correction in prices. Director of EMAPA, Franklin Flores, stated in October that, “We will begin to sell beef in the different distribution points that EMAPA has, such as supermarkets, and also directly with the retail marketers and the market sellers for whom the price from wholesalers has been getting more expensive, we will distribute it at a fair price.”
During the coup, all state companies were closed, a move that threatened the country’s food sovereignty and may well have triggered inflation had the regime not fallen within less than a year. Nevertheless, President Luis Arce has been able to rebuild Bolivia’s state-led economic model, a model which since 2006 has led to a situation in which Bolivia produces 95% of what it consumes in food, providing crucial protection from external shocks and supply chain disruptions.
Featured image: Bolivia has minuscule inflation in food prices as 95% of its consumption comes from domestic production. Photo: Kawsachun News