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After the commodity boom ended in 2014, Bolivia resorted to high public spending and growing domestic credit to maintain rapid economic growth. In a less favorable context, these measures increased public debt and reduced the international reserves and fiscal savings accumulated during the boom. The COVID-19 pandemic exacerbated this situation, plunging the economy into a recession that led to a rebound in poverty.

Following the pandemic, Bolivia achieved a significant economic recovery and poverty reduction due to easing confinement measures and improvements in the international context, includingrising prices of the main export products. However, high public debt and modest international reserves limit efforts to boost the economy, especially if the private sector does not play a more active and sustained role.

In addition to its high vulnerability to climate-related disasters, Bolivia is exposed to different risks associated with the international context, such as the volatility of commodity prices, the global economic slowdown, and rising international interest rates.

In this context, sustainable recovery requires addressing some structural challenges. Bolivia could benefit from a medium-term strategy to address macroeconomic imbalances, underpin competitiveness, and increase resilience to changes in the international environment or adverse climate events. Achieving these objectives while continuing to improve service delivery and protecting the most vulnerable population requires improving public sector efficiency.

Limited gas reserves, high fuel subsidies, an increasingly challenging regional market, and global efforts to decarbonize the energy sector make it necessary to seek alternatives to gas exports. Boosting private investment would help drive growth and promote quality employment.

Last Updated: Apr 11, 2023


Bolivia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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BOLIVIA +591 2261-3300
Av. Ballivián No. 1087, edificio Green Tower, Calacoto. La Paz
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433