The Bolivian economy is experiencing its most critical moment in 40 years. With accumulated inflation of 15.53% in the first half of 2025—the double of what the government had projected for the entire year—the Andean country is plunging into a perfect storm where shortages, lack of foreign currency, suffocating subsidies, and growing social tension converge. All this is happening just weeks before the presidential elections on August 17, which are anticipated to be the most tense of the last decade.
The figure was confirmed by Humberto Arandia, director of the National Institute of Statistics (INE), who admitted in a press conference that "it's very high" and that its effects "are felt in the citizens' pockets". The figure not only far exceeds the 7.5% target set by President Luis Arce's government, but also constitutes the highest level since the early 2000s.
June's monthly inflation climbed to a concerning 5.2%, a jump that set off all the alarms in the productive, financial, and social sectors. With runaway prices and growing uncertainty, Bolivia faces a crisis of confidence that threatens to further worsen the situation.
The origin of the economic deterioration is none other than the exhaustion of the model inherited from former president Evo Morales, based on state interventionism, exchange controls, and the artificial maintenance of prices through subsidies with dollars from the Central Bank. The country, which was once a net exporter of hydrocarbons, has now become an importer that depends on scarce foreign currency to guarantee the supply of fuel and basic products.
