{
  "title": "Public Information Notice: IMF Executive Board Reviews Bolivia's Performance Under Past Fund-Supported Programs",
  "publication": "IMF News, April 15, 2005",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn0553",
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  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2005-04-15",
  "sections": [
    {
      "heading": "Background",
      "content": "- Publication date: April 15, 2005.\n- Review date reported: On April 8, 2005, the Executive Board of the International Monetary Fund (IMF) reviewed Bolivia's experience with IMF-supported programs since 1994, based on an Ex Post Assessment of Longer Term Program Engagement.  \n- Note in source: \"This PIN summarizes the views of the Executive Board as expressed during the April 8, 2004 Executive Board discussion based on the staff report.\"\n- Context:\n  - Structural reforms in the 1980s and 1990s were among the most extensive in Latin America; economic growth increased and social indicators improved significantly.\n  - Trend growth did not improve as much as expected and poverty remains very high.\n  - Between 1998 and 2002 the economy suffered a series of shocks: average per capita income growth turned negative, the fiscal situation unraveled, debt increased sharply, and in 2002-2003 there were several episodes of financial instability.\n  - Growth recovered in 2004, \"in part driven by favorable terms of trade,\" but the economic and financial situation remained fragile."
    },
    {
      "heading": "Ex Post Assessment — Main reasons Bolivia \"did not do better\"",
      "content": "- The Ex Post Assessment concludes Bolivia did not do better for four main reasons:\n  - \"(i) governance problems and inadequate government services, which contributed to a poor business environment and inhibited growth;\"\n  - \"(ii) the adverse shocks of 1998-2002, which harmed Bolivia both directly and by generating social pressures that made reforms more difficult and led to persistent increases in government spending;\"\n  - \"(iii) incomplete or delayed implementation of critical financial and fiscal-structural reforms;\"\n  - \"(iv) continuing financial dollarization, which remains a source of financial vulnerability.\"\n- The assessment states: \"Significant progress in these areas will require a social consensus for reforms and institutional changes over the medium-term which has so far been elusive.\""
    },
    {
      "heading": "Executive Board Assessment — Findings and policy recommendations",
      "content": "- Directors agreed that to address Bolivia's main economic problems—\"insufficient growth, and fiscal and financial vulnerabilities\"—fundamental institutional and structural reforms are needed.\n- Recommended reforms and policy priorities (as stated by Directors):\n  - \"improving governance,\"\n  - \"reducing and better managing public expenditure,\"\n  - \"creating a more equitable and efficient tax system,\"\n  - \"strengthening the banking system,\"\n  - \"beginning a process of financial de-dollarization.\"\n- Programmatic view:\n  - \"In that context, Directors considered that extension of the Stand-By Arrangement will be helpful as a bridge toward a possible PRGF arrangement, while the authorities build sufficient social consensus over medium-term policies.\""
    },
    {
      "heading": "Selected economic and financial indicators (highlights drawn from table for 1995–2004)",
      "content": "- Real GDP (annual percentage change): 4.1 (average shown in table).\n- CPI inflation (end-of-period): 12.3 (1995), 12.6 (1996), 7.9 (1997), 6.7 (1998), 3.1 (1999), 3.4 (2000), 0.9 (2001), 2.4 (2002), 3.9 (2003), 4.6 (2004).\n- Gross domestic investment (percent of GDP): 15.1 (average), 15.2 (1995), 16.2 (1996), 19.6 (1997), 23.6 (1998), 18.8 (1999), 18.3 (2000), 14.2 (2001), 14.7 (2002), 11.1 (2003), 12.7 (2004).\n- Gross national savings (percent of GDP): 9.7 (average), 10.2 (1995), 11.7 (1996), 15.8 (1997), 12.9 (1998), 13.0 (1999), 10.8 (2000), 10.6 (2001), 15.7 (2002).\n- Combined public sector overall balance (percent of GDP): -4.4 (average), -1.8 (1995), -1.9 (1996), -3.3 (1997), -4.7 (1998), -3.5 (1999), -3.7 (2000), -6.9 (2001), -8.9 (2002), -8.1 (2003), -5.7 (2004).\n- Nonfinancial public sector debt (percent of GDP): 72.5 (1990-94), 65.7 (1995), 60.5 (1996), 60.1 (1997), 59.7 (1998), 58.8 (1999), 53.7 (2000), 61.6 (2001), 73.8 (2002), 74.6 (2003).\n  - External (incl. IMF) component: 57.4 (1990-94), 50.6 (1995), 45.9 (1996), 45.3 (1997), 49.7 (1998), 47.3 (1999), 36.1 (2000), 42.4 (2001), 51.3 (2002), 52.6 (2003).\n  - Domestic component: 15.0 (1990-94), 14.9 (1995), 17.6 (1996), 19.3 (1997), 22.5 (1998), 22.0 (1999).\n- Current account (US$ million): -5.5 (1995), -7.0 (1996), -7.9 (1997), -5.9 (1998), -5.3 (1999), -3.4 (2000), -4.2 (2001).\n- Direct investment (percent of GDP): 11.2 (1990-94), 8.4 (1995), 8.3 (1996), 8.7 (1997), 1.3 (2003 as shown in table).\n- Merchandise export volume, percent change: 10.3 (1995), 13.2 (1996), 6.0 (1997).\n- Merchandise import volume, percent change: -0.3 (1995), 29.3 (1996), 25.0 (1997), 14.5 (1998), -10.6 (1999), -5.4 (2000), 3.3 (2001), -10.1 (2002).\n- Terms of trade, percent change (deterioration -): -6.5 (1995), -9.1 (1996), 4.8 (1997), -2.7 (1998), -1.4 (1999).\n- Gross international reserves (months of imports of goods and services): 4.5 (1995), 5.9 (1996), 7.6 (1997), 8.0 (1998), 6.5 (1999), 6.8 (2000).\n- M3 growth (annual percentage change): 17.3 (average), 13.7 (1995), -3.0 (1996) [table labels imply at current exchange rates].\n- Credit to private sector (annual percentage change): 39.6 (average), 19.2 (1995), 23.8 (1996), -2.6 (1997), -8.0 (1998), -1.0 (1999), -0.5 (2000).\n- Yield on T-bills in Bolivianos (e.o.p., percent): 27.9 (1995), 26.6 (1996), 16.5 (1997), 12.2 (1998), 17.2 (1999), 10.9 (2000).\n- Yield on T-bills in U.S. dollars (e.o.p., percent): 10.1 (1995), 14.8 (1996), 8.6 (1997), 9.1 (1998), 4.9 (1999), 6.2 (2000), 4.3 (2001).\n- Banking system deposits (annual change): 15.3 (1995), 28.7 (1996), 17.7 (1997), -4.3 (1998), 0.3 (1999).\n- Foreign currency deposits (percent of total deposits): 80.7 (1995), 80.4 (1996), 92.1 (1997), 91.9 (1998), 92.2 (1999), 92.9 (2000), 92.6 (2001), 90.6 (2002), 86.5 (2003).\n- Non-performing loans (percent of total loans): 6.6 (1995), 11.6 (1996), 16.7 (1997), 14.0 (1998).\n- Bolivianos/U.S. dollar (end-of-period exchange rate): 4.94 (1995), 5.19 (1996), 5.36 (1997), 5.65 (1998), 6.00 (1999), 6.40 (2000), 6.83 (2001), 7.50 (2002), 7.84 (2003), 8.06 (2004).\n- REER (percentage change during year): 1.1 (1995), 2.2 (1996), -1.6 (1997), -8.5 (1998), -5.2 (1999)."
    },
    {
      "heading": "Sources and notes",
      "content": "- Sources cited in table: Central Bank of Bolivia; Ministry of Finance; and Fund staff estimates.\n- Note in table: \"1/ Reflects debt relief under the original and enhanced HIPC initiatives.\"\n\nIMF External Relations Department — Public Affairs; Public Information Notice dated April 15, 2005.\n\n---\n\n\n References\n\n- Bolivia and the IMF\n- Public Information Notices\n- Article IV\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn0553"
    }
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    "Published: April 15, 2005",
    "Publication date: April 15, 2005.",
    "Review date reported: On April 8, 2005, the Executive Board of the International Monetary Fund (IMF) reviewed Bolivia's experience with IMF-supported programs since 1994, based on an Ex Post Assessment of Longer Term Program Engagement.",
    "Note in source: \"This PIN summarizes the views of the Executive Board as expressed during the April 8, 2004 Executive Board discussion based on the staff report.\"",
    "Context:",
    "The Ex Post Assessment concludes Bolivia did not do better for four main reasons:",
    "The assessment states: \"Significant progress in these areas will require a social consensus for reforms and institutional changes over the medium-term which has so far been elusive.\"",
    "Directors agreed that to address Bolivia's main economic problems—\"insufficient growth, and fiscal and financial vulnerabilities\"—fundamental institutional and structural reforms are needed.",
    "Recommended reforms and policy priorities (as stated by Directors):",
    "Programmatic view:",
    "Real GDP (annual percentage change): 4.1 (average shown in table).",
    "CPI inflation (end-of-period): 12.3 (1995), 12.6 (1996), 7.9 (1997), 6.7 (1998), 3.1 (1999), 3.4 (2000), 0.9 (2001), 2.4 (2002), 3.9 (2003), 4.6 (2004).",
    "Gross domestic investment (percent of GDP): 15.1 (average), 15.2 (1995), 16.2 (1996), 19.6 (1997), 23.6 (1998), 18.8 (1999), 18.3 (2000), 14.2 (2001), 14.7 (2002), 11.1 (2003), 12.7 (2004).",
    "Gross national savings (percent of GDP): 9.7 (average), 10.2 (1995), 11.7 (1996), 15.8 (1997), 12.9 (1998), 13.0 (1999), 10.8 (2000), 10.6 (2001), 15.7 (2002).",
    "Combined public sector overall balance (percent of GDP): -4.4 (average), -1.8 (1995), -1.9 (1996), -3.3 (1997), -4.7 (1998), -3.5 (1999), -3.7 (2000), -6.9 (2001), -8.9 (2002), -8.1 (2003), -5.7 (2004).",
    "Nonfinancial public sector debt (percent of GDP): 72.5 (1990-94), 65.7 (1995), 60.5 (1996), 60.1 (1997), 59.7 (1998), 58.8 (1999), 53.7 (2000), 61.6 (2001), 73.8 (2002), 74.6 (2003).",
    "Current account (US$ million): -5.5 (1995), -7.0 (1996), -7.9 (1997), -5.9 (1998), -5.3 (1999), -3.4 (2000), -4.2 (2001).",
    "Direct investment (percent of GDP): 11.2 (1990-94), 8.4 (1995), 8.3 (1996), 8.7 (1997), 1.3 (2003 as shown in table).",
    "Merchandise export volume, percent change: 10.3 (1995), 13.2 (1996), 6.0 (1997).",
    "Merchandise import volume, percent change: -0.3 (1995), 29.3 (1996), 25.0 (1997), 14.5 (1998), -10.6 (1999), -5.4 (2000), 3.3 (2001), -10.1 (2002).",
    "Terms of trade, percent change (deterioration -): -6.5 (1995), -9.1 (1996), 4.8 (1997), -2.7 (1998), -1.4 (1999).",
    "Gross international reserves (months of imports of goods and services): 4.5 (1995), 5.9 (1996), 7.6 (1997), 8.0 (1998), 6.5 (1999), 6.8 (2000).",
    "M3 growth (annual percentage change): 17.3 (average), 13.7 (1995), -3.0 (1996) [table labels imply at current exchange rates].",
    "Credit to private sector (annual percentage change): 39.6 (average), 19.2 (1995), 23.8 (1996), -2.6 (1997), -8.0 (1998), -1.0 (1999), -0.5 (2000).",
    "Yield on T-bills in Bolivianos (e.o.p., percent): 27.9 (1995), 26.6 (1996), 16.5 (1997), 12.2 (1998), 17.2 (1999), 10.9 (2000).",
    "Yield on T-bills in U.S. dollars (e.o.p., percent): 10.1 (1995), 14.8 (1996), 8.6 (1997), 9.1 (1998), 4.9 (1999), 6.2 (2000), 4.3 (2001).",
    "Banking system deposits (annual change): 15.3 (1995), 28.7 (1996), 17.7 (1997), -4.3 (1998), 0.3 (1999).",
    "Foreign currency deposits (percent of total deposits): 80.7 (1995), 80.4 (1996), 92.1 (1997), 91.9 (1998), 92.2 (1999), 92.9 (2000), 92.6 (2001), 90.6 (2002), 86.5 (2003).",
    "Non-performing loans (percent of total loans): 6.6 (1995), 11.6 (1996), 16.7 (1997), 14.0 (1998).",
    "Bolivianos/U.S. dollar (end-of-period exchange rate): 4.94 (1995), 5.19 (1996), 5.36 (1997), 5.65 (1998), 6.00 (1999), 6.40 (2000), 6.83 (2001), 7.50 (2002), 7.84 (2003), 8.06 (2004).",
    "REER (percentage change during year): 1.1 (1995), 2.2 (1996), -1.6 (1997), -8.5 (1998), -5.2 (1999).",
    "Sources cited in table: Central Bank of Bolivia; Ministry of Finance; and Fund staff estimates.",
    "Note in table: \"1/ Reflects debt relief under the original and enhanced HIPC initiatives.\"",
    "[Bolivia and the IMF](http://www.imf.org/external/country/BOL/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
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