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Quick Facts
- Population:
- GDP (PPP):
- $106.9 billion
- 1.6% 5-year compound annual growth
- $9,056 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
- Public Debt:
Bolivia’s economic freedom score is 43.4, making its economy the 167th freest in the 2023 Index. Its score is 0.4 point better than last year. Bolivia is ranked 22nd among 32 countries in the Americas region, and its overall score is below the regional and world averages.
The foundations of economic freedom in Bolivia remain severely hampered by structural and institutional problems. The judicial system is vulnerable to political interference, corruption is prevalent, and the rule of law is weak. The state’s growing presence in economic activity has moved the economy ever further from free-market openness.
Background
Despite one of the world’s richest lithium reserves and high natural gas exports, Bolivia remains characterized by deeply rooted poverty, illegal drug activity, and populist authoritarian tendencies. President Luis Arce was elected in 2020 following Evo Morales’s resignation after nearly 14 years in power, the brief tenure of the centrist Democratic Unity coalition’s Jeanine Áñez, and the return of Morales’s Socialist Movement and subsequent political arrest of Áñez. Arce has continued Morales’s interventionist policies, but fiscal deficits and recession may force him to be more pragmatic. Amid the global lithium rush, the presence of China, Russia, and Iran is growing.
Rule of Law
The overall rule of law is weak in Bolivia. The country’s property rights score is below the world average; its judicial effectiveness score is below the world average; and its government integrity score is below the world average.
Government Size
The top individual and corporate tax rates are, respectively, 13 percent and 25 percent. The tax burden equals 22.4 percent of GDP. Three-year government spending and budget balance averages are, respectively, 36.1 percent and –9.8 percent of GDP. Public debt equals 80.5 percent of GDP.
Regulatory Efficiency
Overall business freedom remains mostly unchanged and at a low level. The labor code is outdated and burdensome. The government maintains controls on the prices of products such as sugar, maize, and bread. The most recent available inflation rate is 0.7 percent.
Open Markets
The trade-weighted average tariff rate is 10 percent, and four nontariff measures are in force. The overall investment framework is opaque, and the government prioritizes domestic investment over foreign investment. The financial sector is vulnerable to state interference and is not fully developed.