Bolivia Secures $1.9 Billion 36-Month IMF Extended Fund Facility

The Executive Board of the International Monetary Fund approved a 36-month arrangement under the Extended Fund Facility (EFF) for Bolivia on October 2, 2026, with access of SDR 1.369 billion, equivalent to 570 percent of quota or about US$1.9 billion, the Fund announced. The Board’s approval allows the Bolivian authorities an immediate disbursement of SDR 156 million, or about US$214 million. Subsequent disbursements will be phased over the duration of the arrangement, contingent on the completion of program reviews.

The authorities’ EFF-supported program aims to restore macroeconomic stability, strengthen social safety nets, rebuild international reserves, reduce fiscal and external vulnerabilities, foster financial sector resilience, and lay the foundations for sustainable, inclusive, private sector-led growth, according to the announcement. The Fund said the program is expected to catalyze around US$4 billion in additional financing from other international financial institutions.

The Fund said fiscal measures, supported by stronger fiscal institutions and more efficient spending, will help place public debt on a firm downward trajectory while protecting vulnerable households. The program will also promote a more flexible exchange rate regime, enhance monetary policy and financial supervision frameworks, and advance reforms to improve governance, transparency, and the business environment, to promote private investment and a job-rich recovery.

Fiscal and Monetary Pillars

Following the Executive Board’s discussion of Bolivia, Nigel Clarke, Deputy Managing Director and Acting Chair, said the Bolivian authorities had taken significant actions over the past year to address long-standing macroeconomic imbalances. “Fiscal sustainability is the program’s central anchor, while strengthening support to vulnerable households,” Clarke said. He said the frontloaded fiscal effort includes phasing out remaining fuel subsidies through an automatic pricing mechanism alongside stronger and better-targeted social protection, and he cited enhancing expenditure efficiency, addressing arrears, reforming public enterprises, and strengthening fiscal institutions, including a medium-term fiscal framework anchored in debt reduction.

“A market-determined exchange rate and preserving a credible monetary framework are essential to promote external balance and sustain price stability,” Clarke said. He described the elimination of new central bank budget financing and the transition to reserve money targeting as important steps, and said prudent liquidity management, reserve accumulation, foreign exchange intervention limited to addressing disorderly market conditions, and reforms to strengthen central bank autonomy, governance, and accountability will be critical to bolster credibility.

Clarke said the authorities are taking welcome steps to strengthen financial sector supervision and crisis preparedness, that close monitoring of vulnerabilities remains critical while prudential standards are modernized, and that reforms to strengthen anti-money laundering and counter-terrorism financing frameworks will also be important.

He said the structural reform agenda aims to improve the business environment and governance, reduce market distortions, attract private investment, and promote formal employment, and that well-sequenced capacity development and clear communication of program objectives will be essential to support timely implementation and sustain public support. Sustained implementation, robust contingency planning, and multilateral support will be critical to the program’s success, he said.

Projections and Path to Approval

A table of selected economic indicators for 2025 through 2027 published with the announcement, sourced from the Bolivian authorities and Fund staff calculations, projects real GDP at -1.6 percent in 2025, -3.0 percent in 2026, and -1.5 percent in 2027. Period-average CPI inflation is projected at 19.5 percent in 2025, 12.7 percent in 2026, and 15.8 percent in 2027, with end-of-period inflation at 20.4, 14.2, and 10.7 percent, respectively.

The overall public sector balance is shown at -11.4 percent of GDP in 2025, -9.2 percent in 2026, and -6.7 percent in 2027, while total gross nonfinancial public sector debt is shown at 83.3 percent of GDP in 2025, 100.2 percent in 2026, and 95.1 percent in 2027. Gross international reserves are shown at US$3,713 million in 2025, US$5,734 million in 2026, and US$7,297 million in 2027, and the current account at -1.9 percent of GDP in 2025, 1.6 percent in 2026, and 1.0 percent in 2027. The table also lists a 2024 poverty rate of 37.7 percent, 2024 GDP per capita of US$4,483, and an IMF quota of SDR 240.1 million.

The Board’s decision follows a staff-level agreement the IMF announced on July 29, 2026, after an IMF staff team led by Joana Pereira held discussions with the Bolivian authorities in Bolivia and in Washington, D.C. between May and July 2026. That agreement covered the same 36-month arrangement of about US$1.9 billion, equivalent to SDR 1,369 million or 570 percent of quota, and was subject to Executive Board approval and contingent on the implementation of agreed prior actions.

IMF staff said in July that Bolivia had faced significant macroeconomic challenges in recent years, driven by persistent fiscal deficits, declining hydrocarbon production, dwindling international reserves, high inflation, and distortions in foreign exchange and product markets. Staff said those imbalances had constrained economic activity, heightened external vulnerabilities, and eroded real incomes, and that the new administration had launched a reform plan to address the challenges and restore macroeconomic stability. Staff also said the program was expected to help catalyze financing from the World Bank, the Inter-American Development Bank, and other development partners, contributing to a broader financing package of over US$5 billion over the program period.