The October report “Economic Outlook for Latin America and the Caribbean,” presented by the World Bank, warns that Bolivia could end 2026 with a 2.8 % drop in Gross Domestic Product (GDP).

According to the organization, this would make it the nation with the most pronounced economic contraction in Latin America and the Caribbean, “in a scenario marked by the macroeconomic stabilization process and the shift in its economic policy,” the report states.

The data places Bolivia “last among the economies of the region and further deteriorates the outlook compared to the previous estimate.” However, the World Bank projects that the Bolivian economy will experience a partial recovery in 2027, although it will still be in negative territory, with a projected contraction of 1.7 %.

The country has yet to stabilize in the face of changes in economic policy compared to the model implemented in recent years. In this regard, the World Bank notes that “since the end of 2025, Bolivian authorities have reduced fuel subsidies and tightened monetary policy as part of measures aimed at addressing accumulated imbalances.”

On the other hand, in the middle of this year, the nation adopted a flexible exchange rate regime. However, “pressures on international reserves, the foreign exchange market, public finances, and fuel supplies persist, problems that have forced the government to implement adjustment measures as it seeks to restore macroeconomic stability.”

M.Pino

Source: xinhuanet

(Reference image source: Alain Bonnardeaux on Unsplash)

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