Daily Archives: November 4, 2011

Governmental inflation estimate, falls short for 2011

El Deber’s website reported last night about current Bolivian government falling short on their inflation estimates.

By the end of the year, the government was expecting a 6% annual inflation rate. Which was adjusted earlier this year, with an incredible 50% increase, yes that is right, 50% increase following the aftermath of the “gasolinazo” (government generated chaos by trying to eliminate the gasoline, gas and diesel subsidies with sudden increases of over 60%) in December 2010. The 2011 initial projected figure was 4%.

The October consumer price index (CPI) rose by 0.47% compared with the behavior of September. The food sector is again the main driver for a rising inflation, prices rose in October by 1.07%; furniture, domestic goods and services by 0.58%, housing and basic services by 0.41%.

Carrot prices went up by 23.64%, 13.74% for peas, apples by 13.16% and 7.71% for potatoes, the report of the National Statistics Institute (INE) says.


If we take the original inflation expected rate of 4%, then expecting 6% by December 31, 2011 and such figure is already above 6% and two “expensive” months yet to come (Christmas and end-of-year holidays). We can simply say this government was wrong on two accounts: generating unnecessary unrest by talking again this week about gasoline subsidies and then doing nothing (at least three ministers and congressmen saying there will be no increase in fuel prices and that current Bolivian president did not imply that when he talked about it…); and failing to understand IMF’s recent recommendation, to save for bad times… which Economics Minister Luis Arce said Bolivia can not slow down… and they said they could lecture us on Economics…