Rise of the parallel dollar, restructure the economic model and cut fiscal spending | Alza del dólar paralelo, reestructurar modelo económico y recortar gasto fiscal

By Hortencia Rivera, Eju.tv:

In response to the rise of the parallel dollar, experts suggest restructuring the economic model and cutting fiscal spending

A report from EFE shows that exchange houses are already offering the dollar at Bs 12.60, leading various analysts to express opinions and consider the urgent need for a summit to adopt measures.

[AF[AFP] / From the College of Economists, it is observed that there has even been a 100% increase in the price of the dollar in the informal market.
Source: Unitel

In light of the rise of the parallel dollar being recorded in different parts of the country, various voices have analyzed the situation, agreeing that urgent measures must be taken to restructure the economic model and reduce fiscal spending, as well as to convene a summit to address short, medium, and long-term alternatives.

According to a report from the EFE agency, during a tour of several exchange houses in downtown La Paz, it was found that while these show signs with the official exchange rate, the dollar is being sold for up to Bs 12.60, although those in charge claim they do not have the U.S. currency to sell.

The president of the College of Economists of Santa Cruz, Claudia Pacheco, even warned that the parallel exchange rate has exceeded the official exchange rate (Bs 6.86 – Bs 6.96) by more than 100%, which means a greater loss of purchasing power for all citizens and an increase in final prices. She, therefore, considered it necessary to analyze the economic model.

The alternatives involve short, medium, and long-term decisions. We know that medium and long-term decisions may not be taken into account or decided upon at this time because we are facing an election year. The decisions that have been made, such as the agreement reached with entrepreneurs, have not been sufficient, nor have they been entirely clear,” Pacheco stated.

What Measures to Take?

Pacheco emphasized that the state economic model no longer aligns with reality, so an urgent measure involves restructuring it “because we need it to adapt to the new reality.”

In this vein, she also suggests other measures such as cutting fiscal spending, using biotechnology, and updating legislation to provide legal security assurances and attract investment. This issue was highlighted by Brazil’s president, Lula da Silva, during his recent visit to Bolivia, as Pacheco recalled.

Economist Gonzalo Chávez also agreed on the need for fiscal adjustments and a return to a flexible exchange rate to improve the country’s economy.

“The government needs a more comprehensive vision, not only to obtain foreign currency but also to make fiscal adjustments, implement constructive monetary policy, and, of course, I believe it is time to return to a flexible exchange rate,” he emphasized.

While the president of the National Association of Economists, Jorge Akamine, also suggested convening a summit due to the rise in the dollar, noting that it has worsened due to the blockades and fuel shortages.

Akamine emphasized that the government must send messages accompanied by actions, as effective solutions have not yet been implemented to address the current situation in the country, making it urgent to take measures to stabilize macroeconomic variables.

It will become increasingly difficult to solve the problems, and the effect will directly lead to rising prices and difficulties in foreign trade,” said the executive.

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