The government has set the annual wage increase at 3%. The finance minister, Javier Cuevas, said that it was appropriate that wages should rise in line with prices. He accepted that congress may think differently, but said he would argue the case for a comparatively expansive national wage increase. Since 1999, successive governments have kept the annual increase in wages below the rate of inflation.
The budget calls for spending of 32bn bolivianos (US$4.1bn). The fiscal deficit will be about 6% of GDP. This is, the government claims, about half a percentage point less than was budgeted for this year. In fact, the fiscal deficit for 2003 is likely to come in at around 7.5% of GDP. The economic growth rate for 2004 is forecast at 3%, much the same as this year.
Cuevas said that he expects better tax collection to increase the tax yield by about 3% in 2004. He said that he does not expect inflation to get much above 3% in 2004 or the rate of the devaluation of the boliviano to exceed 5%. The government claims that 66% of the budget will go on education spending, pension payments and servicing the debt. If university, defence and health spending is included, the proportion rises to 88%.
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