Bolivia Economy Profile 2007

Economy - overview

Bolivia, long one of the poorest and least developed Latin American countries, reformed its economy after suffering a disastrous economic crisis in the early 1980s. The reforms spurred real GDP growth, which averaged 4% in the 1990s, and poverty rates fell. Economic growth, however, lagged again beginning in 1999 because of a global slowdown and homegrown factors such as political turmoil, civil unrest, and soaring fiscal deficits, all of which hurt investor confidence. In 2003, violent protests against the pro-foreign investment economic policies of ex-President SANCHEZ DE LOZADA led to his resignation and the cancellation of plans to export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the government passed a controversial natural gas law that imposed significantly higher taxes on the oil and gas firms and required production firms to sign new operating contracts, which were completed in October 2006. Bolivian officials are in the process of revamping the defunct state-owned oil company and acquiring majority ownership of five gas production, transportation, refining, and storage companies. The MORALES administration plans to increase state control over other sectors as well, including mining, electricity, telecommunications, transportation, and forestry. Real GDP growth in 2003-06 - helped by increased demand for natural gas in neighboring Brazil - was positive, but still below the levels seen during the 1990s. Bolivia's fiscal position has improved in recent years, and the country had a record 6% fiscal surplus for 2006. In 2005, the G8 announced a $2 billion debt-forgiveness plan over the next few decades. The International Monetary Fund and the World Bank forgave a total of approximately $1.8 billion of Bolivian debt in 2006 that has helped reduce fiscal pressures on the government.

GDP (purchasing power parity)

$27.87 billion (2006 est.)

GDP (official exchange rate)

$10.33 billion (2006 est.)

GDP - real growth rate

4.5% (2006 est.)

GDP - per capita (PPP)

$3,100 (2006 est.)

GDP - composition by sector

agriculture: 12.8%
industry: 36.1%
services: 51.2% (2006 est.)

Population below poverty line

64% (2004 est.)

Household income or consumption by percentage share

lowest 10%: 1.3%
highest 10%: 32% (1999)

Inflation rate (consumer prices)

4.3% (2006 est.)

Investment (gross fixed)

12.4% of GDP (2006 est.)

Labor force

4.3 million (2006 est.)

Labor force - by occupation

agriculture: NA%
industry: NA%
services: NA%

Unemployment rate

7.8% in urban areas; widespread underemployment (2006 est.)

Distribution of family income - Gini index

60.6 (2002)

Budget

revenues: $4.153 billion
expenditures: $3.619 billion; including capital expenditures of $741 million (2006 est.)

Industries

mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing

Industrial production growth rate

5.7% (2004 est.)

Electricity - production

4.472 billion kWh (2004)

Electricity - consumption

4.168 billion kWh (2004)

Electricity - exports

0 kWh (2004)

Electricity - imports

9 million kWh (2004)

Oil - production

42,000 bbl/day (2005 est.)

Oil - consumption

47,000 bbl/day (2004 est.)

Oil - imports

NA bbl/day

Oil - exports

NA bbl/day

Oil - proved reserves

458.8 million bbl (1 January 2002)

Natural gas - production

10.05 billion cu m (2004 est.)

Natural gas - consumption

2.14 billion cu m (2004 est.)

Natural gas - exports

7.91 billion cu m (2004 est.)

Natural gas - imports

0 cu m (2004 est.)

Natural gas - proved reserves

679.6 billion cu m (1 January 2005 est.)

Current Account Balance

$688 million (2006 est.)

Agriculture - products

soybeans, coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber

Exports

$3.668 billion f.o.b. (2006 est.)

Exports - commodities

natural gas, soybeans and soy products, crude petroleum, zinc ore, tin

Exports - partners

Brazil 42.7%, US 12%, Argentina 10.6%, Colombia 7.5%, Japan 6.1%, Peru 4.7% (2006)

Imports

$2.934 billion f.o.b. (2006 est.)

Imports - commodities

petroleum products, plastics, paper, aircraft and aircraft parts, prepared foods, automobiles, insecticides, soybeans

Imports - partners

Brazil 24.6%, Argentina 18.8%, Chile 12.2%, US 9.2%, Peru 7.3% (2006)

Reserves of foreign exchange and gold

$3.303 billion (2006 est.)

Debt - external

$5.916 billion (2006 est.)

Economic aid - recipient

$221 million (2005 est.)

Currency (code)

boliviano (BOB)

Exchange rates

bolivianos per US dollar - 8.0159 (2006), 8.0661 (2005), 7.9363 (2004), 7.6592 (2003), 7.17 (2002)

Fiscal year

calendar year