The Executive of Bolivia has closed with the International Monetary Fund (IMF) an economic program for 36 months, based on the Extended Fund Facility (EFF), which aims for the complete elimination of the primary deficit of the non-financial public sector.
According to the memorandum of economic and financial policies disseminated by the Ministry of Economy and Public Finance, this commitment will imply a cumulative fiscal adjustment close to 8.5% of GDP between 2026 and 2029.
The text details that President Rodrigo Paz has received an economy subjected to "systemic vulnerabilities," with a budgetary imbalance of 11% and a public debt that exceeded 80% in 2025.
In light of the depletion of international reserves and the widening of the exchange rate gap, it has been vetoed that the Central Bank of Bolivia (BCB) continues financing public sector spending. At the same time, the monetary authority has moved to a flexible exchange rate scheme after unifying the official and reference quotes.
The roadmap for fiscal consolidation focuses mainly on cutting spending, with the forecast of completely eliminating fuel subsidies starting in 2027 so that prices cover costs.
At the same time, the Bolivian government plans to strengthen social assistance programs and send to the Plurinational Legislative Assembly a bill to create a unified social registry.
The plan also includes a reduction of the public sector wage bill exceeding 1% of GDP throughout the entire implementation period. The authorities have set the monetary base as a "nominal anchor" to steer inflation, estimated at 14% by the end of 2026, towards single-digit levels in 2028.
The memorandum also contemplates conducting stress tests on the banking system and independent reviews of the quality of the assets under supervision. The use of the funds provided by the IMF will be conditioned on the approval of the legislative power.