Bolivia Ends 2025 With 20% Inflation As Dollar Shortages Bite

Key Points

• Bolivia ended 2025 with 20.40% inflation, its highest this century and the steepest since the late 1980s.
• Dollar scarcity, a wide gap between official and street exchange rates, and fuel disruptions pushed up food and transport costs.
• Cutting fuel subsidies may strengthen public finances, but it is lifting prices now and raising political risk.

Bolivia closed 2025 with accumulated inflation of 20.40%, snapping a long period of low and predictable price growth. In December, prices rose 0.59% from November, with official data showing pressure in transport and basic consumption, including staples such as bread.

The surge is uneven across cities. December inflation reached 1.66% in Potosí and 1.48% in the La Paz metropolitan area, versus 0.96% in Oruro and 0.57% in Sucre.

A hard-dollar shortage sits at the center. The official exchange rate remains anchored around 6.96 bolivianos per $1, while the parallel market has hovered near 9.6–9.7, a gap close to 40%.

When firms cannot access official dollars, import and input costs rise fast, and retailers reprice. Fuel is the clearest transmission channel.

Bolivia fuel reform tests economy

Bolivia imports a significant share of the diesel and gasoline it consumes, and paying for shipments requires hard currency. Through 2025, shortages and long queues disrupted freight and food logistics, feeding price increases.

Late in the year, President Rodrigo Paz’s government began unwinding long-standing fuel subsidies. Diesel and premium gasoline prices rose, and authorities moved to allow direct diesel imports after the state oil company struggled to keep supply steady.

The shift moves policy away from controls and toward clearer pricing, but it is politically sensitive in a country used to cheap fuel. Our reporting has shown that the subsidy cuts, while aimed at fiscal repair, are compounding the inflation that already hit 20.40% in 2025—the steepest this century—and raising the risk of social unrest. The financial buffer is thin.

Net international reserves were reported at US$3.275 billion, but a public breakdown showing only about US$75 million in liquid foreign currency was not available.

The IMF has warned that higher import costs, weaker agricultural output, and road blockages can keep food inflation elevated.

The test for 2026 is whether Bolivia can restore confidence in the currency without deepening the slowdown. For neighbors and investors, the outcome will shape trade terms, credit risk, and migration pressures across the region.

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