Macroeconomic Forecast Bolivia

BMI View: Real GDP growth remained strong in Q311, coming in at 5.1%, broadly in line with our end-2011 estimate of 4.5%. However, our concerns over the country's business environment underpin our relatively weak investment outlook, helping to inform our 2012 real GDP growth forecast of 3.7%. While high commodities prices and strong foreign direct investment could pose upside risks to our end-year growth forecast, we believe the difficult regulatory environment for foreign firms, highlighted by the recent threats of nationalization, mitigates these risks.

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