Bolivia faces projected 3.6% GDP decline amid economic instability

The Central Bank of Bolivia (BCB) has reported that the country's Gross Domestic Product (GDP) could decline by 3.6% this year. Data through June indicates a 3.34% decrease, aligning with previous warnings from the World Bank and the International Monetary Fund regarding a contraction exceeding 3%.

This downturn marks a potential third consecutive year of recession. The BCB identifies several primary drivers for the economic decline, including prolonged blockades lasting over fifty days, as well as acute shortages of fuel and US dollars. While mining and certain agricultural sectors showed positive growth due to previous harvests, producers have faced liquidity issues and a lack of inputs for planting seasons.

The construction sector has been among the hardest hit by blockades and reduced investment. Looking ahead, the BCB projects inflation could reach 9.22% by 2026, contributing to concerns regarding reduced consumer spending, business closures, and increased poverty levels.