{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Bolivia",
  "publication": "IMF News, May 30, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/05/30/pr-25168-bolivia-imf-concludes-2025-art-iv-consult",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV consultation for Bolivia on May 2.",
  "publishDate": "2025-05-30",
  "sections": [
    {
      "heading": "Economic performance and near-term outlook",
      "content": "- Real GDP growth moderated to 2.1 percent in the first three quarters of 2024.\n- Moderating factors: decline in hydrocarbons production; slowdown in services activity; drop in soy crops and related manufacturing due to ‘El Niño’ effects.\n- Additional disruptions: road blockages and scarcity of foreign exchange (FX), fuels, and other critical inputs owing to critically low international reserves.\n- Inflation:\n  - Pushed to 10 percent at end-2024, the highest level in over a decade.\n- Labor and incomes:\n  - Unemployment has fallen, but underemployment is rising.\n  - Real incomes retrenched on average.\n- External sector:\n  - Combination of FX shortages, slowing activity, and depreciation of the parallel exchange rate resulted in a compression of the current account deficit to 2.7 percent for 2024."
    },
    {
      "heading": "Fiscal position and public debt",
      "content": "- Fiscal deficit:\n  - Surpassed 10 percent of GDP in 2023-24.\n  - Drivers: declining hydrocarbon revenues, tax exemptions, increased social spending, and higher interest payments.\n  - The deficit has been mostly financed by the central bank amid tight external financing constraints.\n- Public debt:\n  - Increased to 95 percent of GDP.\n- Table excerpts (selected fiscal figures, percent of GDP):\n  - Revenues and grants: 27.8 (2023), 28.4 (2024), 24.8 (2025), 24.2 (2026)\n  - Hydrocarbon related revenue 1/: 2.8 (2023), 2.2 (2024), 1.9 (2025), 1.6 (2026)\n  - Expenditure: 38.7 (2023), 37.5 (2024), 37.4 (2025), 37.4 (2026)\n  - Current: 32.3 (2023), 33.2 (2024), 32.5 (2025), 32.6 (2026)\n  - Capital 2/: 6.4 (2023), 5.4 (2024), 5.0 (2025), 4.8 (2026)\n  - Net lending/borrowing (overall balance): -10.9 (2023), -10.3 (2024), -12.7 (2025), -13.2 (2026)\n  - Non-hydrocarbon balance: -15.4 (2023), -16.4 (2024), -16.3 (2025), -16.0 (2026)\n  - Total gross NFPS debt 3/: 90.8 (2023), 95.0 (2024), 90.4 (2025), 91.4 (2026)"
    },
    {
      "heading": "Monetary framework, exchange rate, and reserves",
      "content": "- Executive Directors: called for a decisive shift in the monetary policy framework given the untenable peg to the U.S. dollar and depleted international reserves.\n- Recommended actions:\n  - Realignment of the exchange rate with market fundamentals and move toward greater exchange rate flexibility.\n  - Front loaded fiscal consolidation and restrictive monetary policy settings to address inflationary pressures, alleviate FX shortages, and allow elimination of FX restrictions.\n  - Increase interest rate flexibility to facilitate effective monetary policy transmission.\n- Reserves and external numbers (selected):\n  - Central Bank gross foreign reserves (in millions of U.S. dollars): 1,808 (est. 2023), 2,009 (2024), 2,118 (2025), 2,199 (2026)\n  - Reserves in percent of GDP: 4.0 (2023), 4.1 (2024), 3.8 (2025), (2026 value listed as blank)\n  - Reserves in percent of ARA: 20.6 (2023), 23.0 (2024), 22.3 (2025), 20.5 (2026)\n  - Current account: -2.5 (2023), -2.7 (2024), -2.6 (2025), -3.2 (2026)\n  - Exports of goods and services: 26.2 (2023), 20.7 (2024), 18.0 (2025), 16.0 (2026)\n  - Imports of goods and services: 28.6 (2023), 23.4 (2024), 20.4 (2025), 18.9 (2026)\n  - Financial account (-= net inflow): -2.0 (2023), -3.5 (2024), -2.8 (2025), -3.3 (2026)"
    },
    {
      "heading": "Financial sector resilience and vulnerabilities",
      "content": "- Overall assessment:\n  - The financial sector remains well buffered.\n- Key dynamics:\n  - Deposits declined in real terms.\n  - Net interest margins pressured by interest rate controls, limiting banks' ability to raise loan rates amid rising inflation and slowing credit growth.\n  - Improved profitability from FX trading gains.\n  - Capital adequacy ratio strengthened to 13.5 percent in 2024.\n  - Non-performing loans remained low at 3.2 percent of total loans.\n- Directors' recommendations:\n  - Strengthen financial sector supervision amid growing economic vulnerabilities.\n  - Close monitoring and contingency planning.\n  - Implement the remaining 2024 FSAP recommendations and strengthen the AML/CFT framework.\n  - Enhance Bolivia’s public pension fund operations by diversifying investments and strengthening the pension supervisor’s independence."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Overall view:\n  - Executive Directors agreed with the thrust of the staff appraisal and expressed concern over Bolivia’s acute fiscal and external imbalances and unsustainable policy mix.\n  - Urgent actions called for to address the overvalued exchange rate, bolster foreign reserves, and implement sustained fiscal consolidation.\n  - Fund readiness to support the authorities through its various activities was underscored.\n  - Careful communication of policy reforms to stakeholders is pivotal to enhance acceptability.\n- Specific recommendations (enumerated):\n  - Shift monetary policy framework: realign exchange rate, enhance exchange rate flexibility, adopt restrictive monetary policy settings, increase interest rate flexibility.\n  - Fiscal consolidation: rationalize the public wage bill, phase out fuel subsidies, enhance public investment management and spending efficiency, mobilize tax revenue, and eliminate monetary financing of fiscal deficits.\n  - Social protection: mitigate effects of policy adjustments on vulnerable populations via improved targeting of the social safety net.\n  - Financial sector and governance: strengthen supervision, implement FSAP recommendations, strengthen AML/CFT framework, diversify public pension fund investments, strengthen pension supervisor independence.\n  - Structural reforms: undertake comprehensive supply side reforms to enhance productivity and growth potential; phase out export ceilings, price controls, and credit quotas; provide a clear regulatory framework to attract private investment; focus public investment on socially beneficial infrastructure; enhance transparency, governance, and anticorruption frameworks.\n  - Data and statistics: improving data adequacy remains a priority."
    },
    {
      "heading": "Selected socioeconomic and macroeconomic indicators (headline figures)",
      "content": "- Population (millions, 2024): 11.3\n- Poverty rate (percent, 2023): 36.5\n- Population growth rate (percent, 2024): 1.4\n- Adult literacy rate (percent, 2023): 95.2\n- Life expectancy at birth (years, 2024): 68.7\n- GDP per capita (US$, 2023): 3,736\n- Total unemployment rate (2024Q3): 3.6\n- IMF Quota (SDR, millions): 240.1\n- Historical and projected GDP and inflation (selected):\n  - Real GDP: 3.1 (2023), 1.3 (2024), 1.1 (2025), 0.9 (2026)\n  - Nominal GDP: 2.6 (2023), 6.5 (2024), 16.4 (2025), 16.9 (2026)\n  - CPI inflation (period average): 5.1 (2023), 15.1 (2024), 15.8 (2025)\n  - CPI inflation (end of period): 2.1 (2023), 10.0 (2024), 15.6 (2025), 16.8 (2026)\n- Money and credit (selected):\n  - Credit to the private sector (percent change): 7.5 (2023), 7.2 (2024)\n  - Credit to the private sector (percent of GDP): 70.8 (2023), 69.2 (2024), 63.9 (2025), 58.6 (2026)\n  - Broad money (percent of GDP): 90.2 (2023), 87.5 (2024), 85.7 (2025), 86.9 (2026)\n- Memorandum items:\n  - Nominal GDP (in billions of U.S. dollars): 45.5 (2023), 48.4 (2024), 56.3 (2025), 65.9 (2026)\n  - Bolivianos/U.S. dollar (end-of-period): 6.9 (2023)\n\nIMF Executive Board concluding statement for the 2025 Article IV consultation with Bolivia (Press Release No. 25/168, May 30, 2025).\n\n---\n\n\n References\n\n- Bolivia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/Bolivia\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/05/30/pr-25168-bolivia-imf-concludes-2025-art-iv-consult"
    }
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    "Published: May 30, 2025",
    "Real GDP growth moderated to 2.1 percent in the first three quarters of 2024.",
    "Moderating factors: decline in hydrocarbons production; slowdown in services activity; drop in soy crops and related manufacturing due to ‘El Niño’ effects.",
    "Additional disruptions: road blockages and scarcity of foreign exchange (FX), fuels, and other critical inputs owing to critically low international reserves.",
    "Inflation:",
    "Labor and incomes:",
    "External sector:",
    "Fiscal deficit:",
    "Public debt:",
    "Table excerpts (selected fiscal figures, percent of GDP):",
    "Executive Directors: called for a decisive shift in the monetary policy framework given the untenable peg to the U.S. dollar and depleted international reserves.",
    "Recommended actions:",
    "Reserves and external numbers (selected):",
    "Overall assessment:",
    "Key dynamics:",
    "Directors' recommendations:",
    "Overall view:",
    "Specific recommendations (enumerated):",
    "Population (millions, 2024): 11.3",
    "Poverty rate (percent, 2023): 36.5",
    "Population growth rate (percent, 2024): 1.4",
    "Adult literacy rate (percent, 2023): 95.2",
    "Life expectancy at birth (years, 2024): 68.7",
    "GDP per capita (US$, 2023): 3,736",
    "Total unemployment rate (2024Q3): 3.6",
    "IMF Quota (SDR, millions): 240.1",
    "Historical and projected GDP and inflation (selected):",
    "Money and credit (selected):",
    "Memorandum items:",
    "[Bolivia and the IMF](http://www.imf.org/external/country/BOL/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/Bolivia](https://www.imf.org/en/Countries/BOL)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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