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Country Risk Service Bolivia

  • ID: 2101530
  • Country Profile
  • July 2020
  • Region: Bolivia
  • 27 Pages
  • The Economist Intelligence Unit
Sovereign risk remains CCC-rated. A sharp drop in global oil and gas prices and the economic impact of the coronavirus (Covid-19) will widen the fiscal deficit and cause the public debt/GDP ratio to rise towards 77% by 2021. Political instability-owing to a weak interim government and the delayed presidential election-will delay fiscal consolidation.

Currency risk remains B-rated. This reflects an overvalued currency that has eroded reserves and weighs on the trade balance. The Economist Intelligence Unit expects the boliviano's peg to the US dollar to be abandoned in 2021. Although we expect this process to be gradual, risks are high, owing to political instability; this could lead to a rating downgrade.

Banking sector risk remains B-rated. Macroeconomic risks have risen significantly as a result of the coronavirus pandemic and a sharp fall in oil and gas prices. Moreover, public policies-such as state intervention and continued inadequate financial supervision-raise risks to asset quality and to the rating.
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Country Risk Service Bolivia

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Positive factors
Negative factors
Rating outlook

Currency risk
Current assessment
Positive factors
Negative factors
Rating outlook
Foreign-exchange regime

Banking sector risk
Current assessment
Positive factors
Negative factors
Rating outlook

Generic risks
Political risk assessment
Economic structure risk assessment

Country risk
Overall country risk

Central scenario for 2020-24: Political stability

Central scenario for 2020-24: Election watch

Central scenario for 2020-24: International relations

Central scenario for 2020-24: Policy trends

Central scenario for 2020-24: Fiscal policy

Central scenario for 2020-24: Monetary policy

Central scenario for 2020-24: Economic growth

Central scenario for 2020-24: Inflation

Central scenario for 2020-24: Exchange rates

Central scenario for 2020-24: External sector

Central scenario for 2020-24: External financing requirement

Central scenario for 2020-24: External debt

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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