Bolivia Economic Outlook
Resource-rich economy:
Bolivia's economy is heavily reliant on natural resources, particularly natural gas and minerals such as zinc, silver, and lithium. The country has one of the world's largest lithium reserves, a potential future growth driver as demand for batteries rises. However, Bolivia's economy remains vulnerable to commodity price fluctuations. The state plays a dominant role in key sectors, and nationalization policies have shaped the economic landscape. While these policies have provided short-term stability, they have also deterred foreign investment in key industries, limiting Bolivia’s ability to develop its full economic potential.
Growth and inflation trends:Bolivia has experienced relatively steady economic growth over the past two decades, driven by exports and public investment. However, economic expansion has slowed recently due to declining natural gas production and falling revenues. While inflation has remained low compared to regional peers, aided by a fixed exchange rate and fuel subsidies, these subsidies have created fiscal pressures that strain government resources. The pandemic further weakened the economy, leading to increased poverty and unemployment. In response, the government has sought to boost economic activity through infrastructure projects and social programs, but concerns about the sustainability of these efforts persist.
Challenges:The country faces significant fiscal and external deficits, exacerbated by high public spending and weak revenue collection. Bolivia also struggles with an informal economy, which limits tax revenues and complicates monetary policy. Additionally, dependence on commodities makes the country highly vulnerable to external shocks. Political uncertainty has further weighed on investor confidence, particularly after the 2019 political crisis, which saw a disputed election and subsequent instability. Efforts to attract foreign investment, particularly in lithium extraction, have been hampered by regulatory uncertainty and government intervention. Furthermore, logistical and infrastructural bottlenecks hinder Bolivia’s trade potential, increasing costs for businesses and limiting competitiveness.
Bolivia’s economic outlook:Bolivia’s economy is expected to grow at a muted pace by emerging market standards in the coming years. Efforts to diversify beyond commodities, improve infrastructure, and attract foreign investment will be crucial for long-term prosperity. However, government intervention and policy unpredictability remain key risks to Bolivia’s economic trajectory. The successful development of the lithium sector could provide a significant boost to exports and fiscal revenues, but this will require regulatory clarity and substantial investment. Over the next decade, Bolivia’s ability to balance state control with market-friendly policies will determine whether it can sustain growth and achieve economic stability.
Bolivia's Macroeconomic Analysis:
Nominal GDP of USD 45.1 billion in 2023.
GDP per capita of USD 3,715 compared to the global average of USD 10,589.
Average real GDP growth of 3.3% over the last decade.
Sector Analysis
In 2022, services accounted for 51% of overall GDP, manufacturing 10%, other industrial activity 26%, and agriculture 13%. Looking at GDP by expenditure, private consumption accounted for 68% of GDP in 2022, government consumption 19%, fixed investment 17%, and net exports -4%.International trade
In 2021, manufactured products made up 3% of total merchandise exports, mineral fuels 20%, food 24%, ores and metals 30% and agricultural raw materials 1%, with other categories accounting for 22% of the total. In the same period, manufactured products made up 65% of total merchandise imports, mineral fuels 26%, food 7%, ores and metals 1% and agricultural raw materials 1%, with other goods accounting for 0% of the total. Total exports were worth USD 11 billion in 2023, while total imports were USD 11 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.3% in the decade to 2023. To read more about GDP growth in Bolivia, go to our dedicated page.
Fiscal policy
Bolivia's fiscal deficit averaged 6.2% of GDP in the decade to 2022. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 5.2% in the decade to 2023. For more information on Bolivia's unemployment click here.
Inflation
Inflation averaged 2.9% in the decade to 2024. Go to our Bolivia inflation page for extra insight.
Monetary Policy
Bolivia's monetary policy rate ended 2024 at 3.05%, down from 9.69% a decade earlier. See our Bolivia monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the boliviano stayed on the same level vs the U.S. dollar. For more info on the boliviano, click here.
Economic situation in Bolivia
Wildfires and protests likely derailed annual GDP growth in H2 2024. Inflation averaged at multi-year highs on goods and fuel shortages. Moreover, oil and natural gas production sank in July–October and July–November, respectively, contributing to a continued double-digit contraction in goods exports through November. This, in turn, bodes ill for foreign exchange reserves, which since June 2023 have remained below the three months’ import cover recommended by the IMF. In 2025, challenges mount: Fitch Ratings downgraded the country’s credit rating to ‘CCC-’ on 24 January, citing dwindling FX reserves. Additionally, inflation shot up to an over 16-year high in January, prompting the government to restrict beef exports from 1 February. In other news, in January, the lower legislative house rejected two lithium contracts with China and Russia worth around USD 2 billion in foreign investment.Bolivia Economic Forecasts
Projections out to 2034.44 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 12 expert analysts.
Want to get insight on the economic outlook for Bolivia in the coming years? FocusEconomics collects projections out to 2034 on 44 economic indicators for Bolivia from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Bolivia economy. To download a sample report on the Bolivia's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.