Summary: Bolivia’s macroeconomic management of the commodity boom facilitated a decade of strong macroeconomic performance and poverty reduction, and the accumulation of sizable policy buffers. As Bolivia remains one of the most commodity-dependent countries in the region, however, sharply lower commodity prices pose serious challenges to making further progress towards the objectives laid out in the authorities’ Patriotic Agenda 2025, including eradication of extreme poverty, better access to health and education, and state-led industrialization. As the authorities implement their 5-year development plan (Plan de Desarrollo Económico y Social 2016–20), sizable fiscal and external current account surpluses during the last decade have turned into large deficits. These deficits are projected to persist over the medium term under current policies, eroding policy buffers and raising questions about the sustainability of the plan.

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