Economic
High Inflation and Distorted Exchange Rate
Persistently high inflation and an overvalued fixed exchange rate threaten macroeconomic stability in Bolivia.
Inflation in Bolivia has surged above 20% year‑on‑year, driven by rising food prices, import shortages, and fiscal pressures. The previous government's fixed, overvalued exchange‑rate regime has distorted the parallel market, eroded foreign‑exchange reserves, and complicated import financing. The currency remains under pressure in informal markets, even as the new administration attempts to stabilize macroeconomic conditions. If the exchange‑rate regime is not adjusted or confidence continues to weaken, inflation could accelerate further, wage pressures may intensify, and social‑unrest from cost‑of‑living shocks could worsen, undermining economic activity and policy credibility.
- Status
- active
- Location
- Bolivia
- Date added
- 2026-03-25 21:03 UTC
- Last updated
- 2026-03-25 21:03 UTC
- Connected threats
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- Not Available