Bolivia: Economic Outline

Economic Indicators

Though rich in mineral resources - with the second-largest reserves of natural gas in South America - Bolivia is one of the region's poorest countries. After the pandemic, Bolivia saw significant economic recovery and poverty reduction due to relaxed isolation measures and improved external conditions, including higher international prices for key exports. Yet, challenges persist with high public debt, declining natural gas output, and modest international reserves hindering government growth initiatives and straining the foreign exchange market, leading to a parallel exchange rate emergence. Furthermore, Bolivia faces various international risks, including commodity price volatility, global economic slowdown, and increasing international interest rates. However, Fitch projected a slowdown in growth, estimating it to have decreased to 2.1% in 2023 from 3.6% in 2022. The IMF anticipates growth of 1.8% in 2024 and 2.1% in 2025, although uncertainties remain, attributed to ongoing balance of payments pressures, low public investment, and limitations on private investment due to a weak regulatory framework.

Since the latter half of 2022, the current account shifted to a deficit due to the reduction in the trade surplus. This surplus transformed into a deficit in 2023, primarily driven by export underperformance caused by economic slowdowns in neighboring countries and China, alongside a decrease in natural gas production. In 2024, this negative trajectory is anticipated to persist, with further declines expected in gas production and sales (with a projected 20% annual export volume decrease in 2023 according to Coface) and ongoing import constraints. However, there has been a reduction in the services deficit, attributed to a rebound in tourist activity. Furthermore, remittances from expatriate Bolivian workers are anticipated to remain robust, supported by favorable employment conditions in Spain, Chile, and the United States. In recent years, the country registered a notable decrease in usable international reserves, reaching critically low levels, thereby increasing risks to both macroeconomic stability and debt servicing capacity. Persistent wide fiscal deficits, primarily funded by borrowing from the central bank, coupled with the absence of a clear consolidation plan, are expected to further strain reserves. Consequently, this has led to foreign exchange rationing and the emergence of parallel-market exchange rates within a stabilized currency regime. In 2024, the public deficit is projected to expand. The government, as detailed in its General State Budget (PGE) implemented at the beginning of January 2024, intends to increasingly depend on public expenditure to stimulate growth and contain inflation. Meanwhile, the IMF estimated the debt-to-GDP ratio at 80.8% in 2023, with a light uptick expected over the forecast horizon (82.1% by 2025). Inflation, at 3% last year, should increase to 4.4% during 2024.

In spite of a sharp fall in poverty in the last decade, nearly 40% of Bolivians still live below the poverty line. The country is also marked by inequalities in the distribution of its wealth and a strong informal sector. However, the unemployment rate is among the lowest in the region, as it stood at an estimated 4.1% in 2023. Nevertheless, informal employment is prevalent in the country. Moreover, the Bolivian justice system has been plagued by corruption, delays, and political interference.

Monetary Indicators	2020	2021	2022	2023	2024
Boliviano (BOB) - Average Annual Exchange Rate For 1 GBP	8.86	9.50	8.52	8.59	8.83

Source: World Bank - Latest available data.

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Latest Update: October 2025