Background on Bolivia’s Economic Situation
Bolivia, a South American nation, experienced a 0.73% economic growth in 2024, according to the country’s national statistics institute, INE. This growth was significantly impacted by road blockades organized by supporters of former president Evo Morales and a sustained decline in hydrocarbon production since 2017. Historically, natural gas exports were the primary driver of Bolivia’s economy.
Economic Challenges and Government Response
Bolivia faces a severe economic crisis due to a shortage of US dollars, caused by the ongoing reduction in gas exports. The government has nearly depleted its liquid reserves to maintain subsidies on imported fuels, which are sold at a loss in the domestic market.
Humberto Arandia, director of INE, stated that months with road blockades in 2024 corresponded to negative PIB performance. These protests, led by Morales’ followers in opposition to President Luis Arce’s administration, occurred in March, causing a 1.7% interannual economic decline. The protests continued in October and November, resulting in contractions of 3.6% and 4.4%, respectively.
Impact on Key Sectors
The agricultural, transportation, and commerce sectors were most affected by these protests. Meanwhile, natural gas and petroleum production plummeted by 13.4% annually.
In 2025, the economic situation further deteriorated, with a record interannual inflation rate of 23.9% in June.
Upcoming Elections and Political Landscape
Bolivians will elect a new government in upcoming general elections. The official left-wing parties are trailing in voter intentions. President Luis Arce, who has been in power since 2020, decided not to seek re-election.
Evo Morales aimed for a fourth term despite being ineligible, but his failure to register as a candidate sparked new protests this year.
Key Questions and Answers
- What is the current economic growth rate of Bolivia? Bolivia’s economy grew by 0.73% in 2024.
- What factors are hindering Bolivia’s economic growth? Road blockades by supporters of former president Evo Morales and a decline in natural gas exports are the main challenges.
- How has the Bolivian government responded to the economic crisis? The government has nearly exhausted its liquid reserves to maintain fuel subsidies.
- Which sectors have been most affected by the protests? The agricultural, transportation, and commerce sectors have been significantly impacted.
- What is the current political situation in Bolivia? Bolivians will hold general elections, with left-wing parties trailing in voter intentions. President Luis Arce will not seek re-election, and Evo Morales’ attempt for a fourth term without eligibility sparked new protests.
