The new Bolivian Government announced on Tuesday a deep adjustment to the General State Budget (PGE) 2026, which was prepared during the administration of the socialist Luis Arce, with the goal of reducing spending by at least 30%, guided by the successful "Chainsaw Plan" of Javier Milei in Argentina.
The decision was communicated by President Rodrigo Paz and the Minister of Economy, José Gabriel Espinoza, who stated that the original project replied more to political criteria than to the country's real needs.
To move forward with the reform, the Executive requested that the Chamber of Deputies return the bill sent by the previous government. Paz strongly criticized the inherited document: "We are going to reformulate that budget, which was for spending and not for investment, not for the promotion of the economy, not for Bolivians," he said.
Espinoza, meanwhile, explained that an article will be added to enable the Executive to review and modify the PGE until February 2026, under a strict rule of fiscal spending reduction. "At the very least, we are going to reduce fiscal spending by 30% for 2026," he stated.
He detailed that this drastic decrease will involve "a thorough process of reviewing public spending and restructuring institutions," especially aimed at a "very strong reduction in current spending." The minister specified that a cut of that size would mean "about four percentage points of GDP" in terms of fiscal deficit reduction.
