Bolivia Economy Set to Shrink 3.6% This Year, the Central Bank Says

Bolivia · ECONOMY

The central bank’s forecast points to a deeper slump, with job losses and a shift toward informal work reshaping the labour market.

The Bolivia economy is set to shrink 3.6% this year, the central bank says, marking a sharp downturn. The contraction reflects deep troubles in the labour market and the energy sector.

Central Bank Forecast

The Banco Central de Bolivia expects gross domestic product to close 2026 at around minus 3.6 percent. This is a contraction, not growth, according to the bank’s second-quarter inflation and monetary policy report.

The report, dated August 2026, was covered by EFE and Infobae on 20 August 2026. The figure signals a challenging year ahead for the Bolivia economy.

Job Losses Mount

Red Uno reported on 20 August 2026, citing the central bank, that about 205,000 jobs were lost up to June 2026. This wave of unemployment is a direct hit on households across the country.

Meanwhile, informal work has surged to 69.7 percent of urban workers. That means many people are working without contracts, pension contributions, or health cover.

Informal Work Dominates

Informal work, which includes jobs outside the formal system, is a useful shorthand for how insecure the labour market is. With nearly seven in ten urban workers in this situation, stability is scarce.

As a result, many Bolivians face unpredictable incomes and little social protection. This trend is likely to continue as the economy contracts.

Energy Sector Strains

The state oil company YPFB has been at the centre of Bolivia’s fuel supply problems in 2026. The Rio Times reported on 20 August 2026 that its fuel debt reached about US$800 million.

In addition, the Camara Boliviana de Hidrocarburos y Energia warned that Bolivia could stop being self-sufficient in natural gas. The country might become a gas importer between 2028 and 2030.

Gas Import Warning

The hydrocarbons chamber’s warning, reported by ERBOL on 20 August 2026, highlights a looming shift. Bolivia could transition from a gas exporter to an importer within a few years.

This would have major implications for the Bolivia economy, affecting energy costs and export revenues. However, the timeline is between 2028 and 2030, not immediate.

Government Response

President Rodrigo Paz, in office since 8 November 2025, faces these economic headwinds. His administration must address both the contraction and the structural issues in energy and labour.

So far, no specific policy measures have been announced in the reports cited. Still, the central bank’s forecast sets a clear benchmark for the year.

Impact on Families

For ordinary Bolivians, the shrinking economy means fewer opportunities and lower incomes. The loss of 205,000 jobs up to June 2026 is already being felt in many communities.

Moreover, the high rate of informal work leaves many without a safety net. This makes the downturn even harder to weather.

Looking Ahead

The Bolivia economy faces a difficult path to recovery, with the central bank’s forecast pointing to a 3.6% contraction. The energy sector’s troubles add another layer of uncertainty.

Nevertheless, the situation could improve if gas imports are avoided and job creation picks up. For now, the outlook remains cautious.

Bolivia Economy in Context

This contraction comes after years of relative stability in the region. However, the combination of job losses, informal work, and energy debt creates a complex challenge.

In short, the Bolivia economy is under pressure from multiple fronts. The coming months will show how the government and businesses adapt.

Frequently Asked Questions

What is the central bank’s forecast for Bolivia’s economy in 2026?

The central bank expects the economy to contract by 3.6% in 2026. This is a decline in gross domestic product, not growth.

How many jobs have been lost in Bolivia in 2026?

According to Red Uno, about 205,000 jobs were lost up to June 2026. This is based on central bank data.

What is the rate of informal work in Bolivia?

Informal work reaches 69.7% of urban workers in Bolivia. This means most urban jobs lack formal contracts and benefits.

Will Bolivia become a gas importer?

The hydrocarbons chamber warns that Bolivia could stop being self-sufficient in natural gas. It might become an importer between 2028 and 2030.

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