Summary

Overview, Inflation (CPI), Inflation (WPI), Money, Interest Rate

On 6 August, President Lucio Gutiérrez's alliance with Pachakutik, the leftist political branch of the Indigenous movement, collapsed, ending vital support that brought him into office last year and helped him in the legislature, where his own party lacks a majority. After almost seven months of participating in the government, Pachakutik pulled its two ministers from the government over International Monetary Fund-required measures they said were derailing the coalition's plans to aid poor farmers and protect state industries. As a result, the government labour bill was rejected, dealing a new blow to the country's IMF program. Gutierrez now has to rule with ad hoc pacts with the mainstream parties he criticized during last year's electoral campaign to pass tax and labor bills required under the IMF program.