Bolivia crosses a worrying turn. The country, which once led the lower inflation rankings in Latin America, Today experiences a strong price rise in the midst of a growing shortage of currencies, fuels and an economic model that shows signs of exhaustion.
So far from 2024, accumulated inflation reached 9.97%, its highest level since 2008. Only in March, prices rose 14.63% Compared to the same month of the previous year, according to the National Statistics Institute, INE. Behind this inflationary rebound hide structural imbalances that had been accumulating for years.
The Bolivian model, based on a fixed exchange rate, generous subsidies and a high state expense, allowed to contain internal tensions for more than a decade. However, the fall in gas exports, the main source of income in the country, has exposed the fragilities of the system.
Bolivia depends largely on imported supplies – from food and fertilizers to industrial and combustible spare parts. The country imports almost all of its diesel and gasoline, but marketed internally at prices well below real costs. That difference, financed by the State, involved in 2024 an expense greater than US $ 2.3 billion, in a context in which international reserves are on the verge of exhaustion.
The International Finance Institute (IIF) estimates that, by the end of 2024, the liquid reserves of the Central Bank will fall below US $ 2 billion, and much of them are not immediate availability.
To face the shortage of currenciesthe government has imposed controls on the use of the dollar and has restricted certain financial operations, which has encouraged the use of alternative mechanisms such as cryptocurrencies.
In 2023, Bolivia managed to avoid a financial collapse thanks to a controversial law that allowed the Central Bank to sell part of its gold reserves. However, the Senate has recently approved a legislative initiative to limit that possibility and protect the remnant of the reserves.
The Andean country now faces the challenge of redefining its economic policy In an increasingly complex scenario, where the margin of maneuver seems to be reduced quickly.
