Bolivia: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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. Bolivia also lacks economic diversification, making the country's economic growth largely supported by natural gas exports. In 2022, the country registered an estimated GDP growth rate of 3.2%, mainly driven by private and public consumption amid an improving job market, higher commodity prices, and an increase in tourism flows. The economy is expected to continue to pick up in the coming years, albeit at a slower pace, with the IMF predicting a GDP growth of 1.8% for 2023 and 1.9% for 2024.

The Bolivian economy seems rather strong in appearance: a sustained growth, an inflation under control (1.7% in 2022), and large currency reserves. However, Bolivia is dependent on oil prices, and the large fall in gas export revenue has affected public accounts: the budget and current deficits are increasing. The expansionary budget also contributed to worsening government debt, which reached 82.6% in 2022. The financing of the deficit is expected to increasingly depend on multilateral donors, such as the IMF, the Andean Development Cooperation, and the World Bank. Furthermore, the current account deficit reached 1.5% in 2022, and it should increase to 2.5% in 2023 and 2.6% in 2024. In 2022, despite the significant increase in commodity prices, consumer price have remained rather contained in Bolivia, particularly due to the currency's peg to the US dollar and price controls on food and fuel. Overcoming the dependency on mineral resources, reforming justice, modernising infrastructure, the increase in the competitiveness of the labour force, combating insecurity and addressing the problem of violence against women are the country's main challenges in the long run. Furthermore, while the pandemic has significantly impacted the economy, the measures implemented to counteract the economic crisis resulting from it have been effective in boosting economic activity.

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 4.4% in 2022. Nevertheless, informal employment is prevalent in the country. Moreover, the Bolivian justice system has been plagued by corruption, delays, and political interference. Additionally, impunity for violent crime and human rights violations remains a serious problem.

Monetary Indicators	2016	2017	2018	2019	2020
Boliviano (BOB) - Average Annual Exchange Rate For 1 GHS	1.73	1.59	1.51	1.33	1.23

Source: World Bank - Latest available data.

© eexpand, All Rights Reserved.
Latest Update: November 2023