Cacti in Bolivia

Bolivia Economic Forecast

Bolivia Economic Outlook

GDP growth weakened slightly in Q3 compared to Q2 due to softer growth of total consumption and fixed investment. Our panelists expect GDP growth to have slowed further in Q4 amid higher average inflation. Heading into the new year, developments have been mixed. On the one hand, average inflation in January–February fell compared to Q4, boding well for private spending. On the other hand, the risk of a run on the currency has grown over the past few weeks. International reserves—excluding gold—fell from USD 1.3 billion at the end of 2022 to just USD 0.9 billion as of 8 February. That figure has probably fallen since; the Central Bank of Bolivia sold several million dollars in just a few days in early March, after announcing that it would sell dollars directly to Bolivians at the official pegged rate of BOB 6.96 per USD to calm fears of a dollar shortage.

Bolivia Inflation

Inflation moderated to 2.6% in February (January: 3.1%). The currency peg and government support kept a lid on inflation in recent months. Our panelists expect Bolivia to maintain one of the region’s lowest inflation rates in 2023. Key factors to watch include changes to the currency peg, government subsidies and export controls.

Bolivia Economic Data

2017 2018 2019 2020 2021
Population (million) 11.2 11.3 11.5 11.6 11.8
GDP (USD bn) 37.3 40.2 40.8 36.7 40.4
GDP per capita (USD) 3 3 3 3 3
GDP (BOB bn) 259 278 283 253 279
Economic Growth (Nominal GDP, ann. var. %) 10.5 7.4 1.5 -10.4 10.3
Economic Growth (GDP, ann. var. %) 4.2 4.2 2.2 -8.7 6.1
Private Consumption (ann. var. %) 4.7 4.3 3.7 -7.9 5.3
Government Consumption (ann. var. %) 4.9 5.1 3.8 -2.8 5.4
Fixed Investment (ann. var. %) 11.8 3.2 -3.5 -25.9 11.9
Exports (G&S, ann. var. %) -5.0 5.2 -1.8 -18.8 15.4
Imports (G&S, ann. var. %) 5.6 1.9 1.5 -25.0 15.7
Fiscal Balance (% of GDP) -7.8 -8.1 -7.2 -12.7 -9.3
Public Debt (% of GDP) 51.3 53.1 59.3 78.0 80.5
Money (ann. var. of M2 %) 8.2 5.4 -7.5 14.1 6.6
Inflation (CPI, ann. var. %, eop) 2.7 1.5 1.5 0.7 0.9
Inflation (CPI, ann. var. %, aop) 2.8 2.3 1.8 0.9 0.7
Prime Lending Rate (%, eop) 8.11 8.04 8.40 7.59 8.02
Exchange Rate (BOB per USD, eop) 6.93 6.93 6.91 6.89 6.91
Exchange Rate (BOB per USD, aop) 6.95 6.93 6.92 6.90 6.90
Current Account Balance (USD bn) -1.9 -1.7 -1.4 0.0 0.9
Current Account Balance (% of GDP) -5.1 -4.3 -3.3 -0.1 2.1
Merchandise Trade Balance (USD bn) -0.6 -0.4 -0.3 0.6 2.2
Merchandise Exports (USD bn) 8.1 8.9 8.8 7.0 11.0
Merchandise Imports (USD bn) 8.7 9.3 9.1 6.4 8.8
Merchandise Exports (ann. var. %) 15.7 9.9 -1.3 -20.6 56.4
Merchandise Imports (ann. var. %) 9.2 7.0 -2.1 -29.8 37.0
Foreign Direct Investment (USD bn) 0.7 0.3 -0.2 -1.1 0.6
International Reserves (USD bn) 8.5 7.2 4.4 2.7 2.2
International Reserves (months of imports) 11.7 9.2 5.7 5.0 3.1
External Debt (USD bn) 13.0 13.2 14.3 15.4 16.0
External Debt (% of GDP) 34.9 33.0 35.0 42.1 39.5

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