IMF Flags Bolivia as a Regional Laggard: 0.6% Growth, 20.8% Inflation

Bolivia is running into a wall. The IMF sees growth at just 0.6% this year with inflation above 20%, while the government still talks up a rebound.

On the ground, output fell 2.4% in the first half of 2025, and everyday life tells the same story: fuel lines that stretch for blocks and a dollar that’s easy to find only at a far weaker street rate than the fixed 6.96 bolivianos.

The story behind the story is a pile-up of pressures. First, politics: months of highway blockades and bruising rivalries froze trucks, delayed supplies, and scared off investment. Second, money: foreign currency is tight.

Gross international reserves were about $3.3 billion at the end of September, and a wide gap between the official and street exchange rates signals how scarce dollars have become.

Third, structure: Bolivia’s gas fields—the export engine that paid the bills for a generation—are yielding less. With fewer export dollars, the state has leaned on fuel subsidies (roughly 14 billion bolivianos so far this year) to keep pump prices steady, but those payouts drain cash and complicate imports of fuel and essentials.

Outside forecasters have turned gloomier too. The UN’s regional commission expects Bolivia to be South America’s slowest grower, while the World Bank says output could shrink by 0.5%.

Officials in La Paz reject talk of stagflation and insist markets are “stable,” and the 2025 budget still assumes growth near 3.7%. That gap—between what people live and what the paperwork promises—is the credibility test.

Why this matters beyond Bolivia: a shrinking, inflation-hit economy ripples outward. It dents cross-border trade with neighbors, pressures migrant flows and remittances, and adds risk to lenders and investors with Andean exposure.

At home it’s simpler: paychecks buy less, small firms delay hiring, and transport costs lift the price of everything.

What to watch next: whether fuel deliveries normalize without bigger subsidy bills; whether dollar supply improves; and whether the government can present a believable plan—on gas output, public spending, and the exchange-rate regime—to stop the cycle of shortages, inflation, and stalled growth.

More: Bolivia news in English, every day from The Rio Times.

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