Bolivia to grow 5.3% in 2011, with an inflation index of more than 6.4%

These results stem from the upturn following the international financial crisis. External sales were buoyant, reflecting a rally in the average prices of Bolivia’s main exports and higher export volumes, especially in the case of natural gas.
The financial sector continued to grow with the domestic loan portfolio expanding by 15.7%. According to ECLAC estimates, economic activity will expand by approximately 5.3% in 2011.
Among the challenges facing the Government of Bolivia are the need to curb the rise in food prices and the inflation that these will trigger, maintain the competitiveness of the country’s main exports and boost the recovery of the mining sector.

Looming inflation
In April 2011, the government reached an agreement with the Bolivia Central Workers’ Union on an 11% rise for teachers and health workers. On 2 March 2011, it raised the public and private minimum wage by 20%. Following successive annual increments, the monthly minimum wage has gone up by 85.2% since 2006 and now stands at 815.4 bolivianos.

This policy, combined  with an important level of CCT (conditional cash transfers) that the populist government of Evo Morales takes ahead raise serious questions about the "healthy" state of the Bolivian economy.

Between nov and oct 2011 the price index in Bolivia raised in 0.32%, reaching and accumulated increase of 6.38% between January and November 2011.

According to the original plan of Bolivia's Central Bank, the inflation should not have reached more than 4%, however by November 2011 this rate is already 6.38%.

The International Monetary Fund (IMF) placed Bolivia among the countries with the highest inflation rates for 2011 for the region, the other countries in the list include Uruguay, Paraguay, Argentina and Venezuela with inflation rates of 7.7% to 25.8%

The problem grows bigger when we look at 2010s figures for Bolivia, which presented an inflation rate of more than 7%