Bolivia: Deceleration amid high imbalances

9/21/2017 - Report
ic_blogtagBoliviaCountry Risk

​Low commodity prices and growing fiscal and external imbalances weigh on growth

The global fall in gas and oil prices since late 2014 has reduced the value of exports and government revenues. This resulted in a deterioration of the external account from +1.4% in 2014 to -3.9% of GDP in 2017. The fiscal account deteriorated from   -3.4% in 2014 to -6.2% of GDP in 2017. Continued low commodity prices as well as slower economic performance of the country’s main trading partners (China, Brazil, and Argentina) have complicated matters further. After growing by +4.3% in 2016, the pace of real GDP growth is set to slow to +4.0% in 2017 and +3.7% in 2018, as tighter fiscal policy weighs on domestic demand.