Inflation in Bolivia skyrockets and reaches its highest level in 17 years

The accumulated inflation in Bolivia reached 5.95% between January and April 2025, according to data released by the National Institute of Statistics (INE). This way, the accumulated figure for the first four months reaches its highest level in 17 years.

The Bolivian government had estimated an annual inflation of 7.5%, so the country has already consumed almost 80% of that projection in just four months. Additionally, the year-on-year inflation reached 2.29%, reflecting an upward trend, especially in food and beverage prices.

According to the INE report, the products that contributed the most to the increase were onions, beef, eggs, cheeses, and shampoo.

This price increase occurs in the context of a severe economic crisis characterized by foreign currency shortages and episodes of fuel shortages, factors that have complicated the transportation and importation of goods, directly impacting costs. Added to this is the emergence of a parallel currency market, where the dollar is traded at more than double the official exchange rate, which also affects the cost of living.

In 2024, Bolivia closed with an accumulated inflation of 9.97%, the highest figure since 2008, and well above the official target of 3.6%, practically tripling it.

The economic outlook for the rest of the year and for the next administration in Bolivia is not favorable. Various reports from international organizations indicate a progressive slowdown of the Bolivian economy in the period 2024-2027, with growth levels below the regional average.

The International Monetary Fund (IMF) estimates that inflation in the country will reach 15.8% in 2025, while the Gross Domestic Product (GDP) growth will be modest, projecting an increase of 1.1% for this year and just 0.9% for 2026.

According to the IMF, Bolivia is experiencing an economic slowdown similar to that of other emerging economies in the region. Added to this is a decline in consumption and private investment, intensified by a lack of dynamism in the external sector.

In the same vein, the World Bank forecasts weak economic performance for 2025, anticipating GDP growth of 1.2% in the current year, a figure considerably lower than the estimate of the General State Budget, which forecasts 3.5%.

In response to these projections, the socialist government of Luis Arce countered, rejecting the estimates of international organizations. It attributes the inflationary surge of 2024 to "situational and external factors," "adverse weather events," "external pressures," "food smuggling" at the borders, and "price speculation."