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Flood-hit Bolivia cuts economic growth outlook
03 Mar 2007 16:38:00 GMT
Source: Reuters
By Eduardo Garcia

TRINIDAD, Bolivia, March 3 (Reuters) - The worst flooding in 25 years in Bolivia has forced South America's poorest nation to cut its forecast for economic growth this year by one percentage point, Vice President Alvaro Garcia Linera said.

"We had estimated 7 percent growth this year. This disaster has slashed that figure to 6 percent," Garcia Linera said late on Friday after arriving in the flood-hit city of Trinidad in the lowlands of northeastern Bolivia.

Bolivia's economy -- dominated by natural gas, mining and agriculture -- grew 4.5 percent in 2006, according to preliminary data. Average growth has been 4 percent over the past 20 years.

President Evo Morales had aimed for 7 percent growth this year, the most robust in more than two decades, through an ambitious government investment program.

The country posted its biggest ever budget surplus last year after Morales nationalized the energy industry.

The flooding, which began two months ago, has killed 35 people, affected some 350,000 others, ruined roads, bridges and homes and wiped out crops from the Andes to the Amazon lowlands.

Around Trinidad, about 19,000 people were evacuated from shantytowns that are underwater.

The extreme weather has killed 22,500 cattle in Beni, the region of which Trinidad is the capital, and destroyed crops in the eastern Santa Cruz region, the country's agricultural heartland, prompting fears of food shortages.

Garcia Linera was in Trinidad to welcome Venezuelan Interior and Justice Minister Pedro Carreno, who was visiting Bolivia to deliver two cargo planes of aid and another aircraft loaded with two helicopters Venezuela is donating permanently to Bolivia.

Carreno said Venezuela will lend Bolivia three additional helicopters to help deliver aid to remote areas.

Venezuelan President Hugo Chavez, a key Morales ally, has pledged $15 million for aid and reconstruction efforts.

"The next stage is the reconstruction and that's going to be harder because helicopters, medical attention or food supplies won't be enough," Linera said. "We are going to need tens of millions, if not hundreds of millions of dollars."


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Last updated:Mon Mar 5 13:36:24 2007