Bolivia to end fuel subsidies in 2027 under IMF agreement

The Bolivian government, led by President Rodrigo Paz, has announced that the state will end fuel subsidies starting in January 2027. This decision follows an agreement with the International Monetary Fund (IMF) as part of a $1.9 billion, 36-month lending program that is currently awaiting congressional approval.

To mitigate the impact of the subsidy removal, the government plans to increase specific social welfare expenditures. The move marks a significant shift away from the statist policies maintained by previous socialist administrations under Evo Morales and Luis Arce, who had kept fuel prices subsidized for nearly two decades.

Bolivia is currently facing its worst economic crisis in 40 years, characterized by severe fuel shortages, depleted foreign exchange reserves, and widespread smuggling. Economy Minister Cristian Morales stated that the economic program is necessary to recover from the inherited financial collapse and emphasized that the price liberalization was not a measure imposed by the IMF.