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Morales may face less benign outlook in Bolivia

Tuesday, January 27, 2015

Significance

Bolstered by Bolivia enjoying strong economic growth in 2014 and having won re-election with 61% of the vote, Morales begins the next five-year term in a strong position. However, lower prices for natural gas exports this year will force greater austerity.

Impacts

  • The collapse in world oil prices, if sustained, will have a serious impact on Bolivia's balance of payments.
  • In the short run, substantial foreign reserves will help cushion the external shock.
  • The government lacks a big idea to guide policy over the next five years.
  • More emphasis will be placed on national development issues than indigenous rights.
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