Bolivia's legislature approves $1.9 billion IMF loan package
Bolivia's lower house and Senate have approved a $1.9 billion IMF loan under a 36-month program aimed at easing currency shortages and rebuilding reserves.
Bolivian lawmakers have approved an agreement granting the country access to $1.9 billion in financing from the International Monetary Fund, a step the government hopes will restore its access to external credit.
The lower house passed the measure on Thursday and the Senate ratified it on Friday. The loan forms part of a 36-month program under the IMF's Extended Fund Facility and is expected to open the door to more than $5 billion in further support from institutions including the World Bank, the Inter-American Development Bank and other partners.
The approval comes as President Rodrigo Paz's administration contends with foreign currency shortages, a deteriorating fiscal position and falling international reserves.
In exchange for the financing, Bolivia has committed to a stabilization program that includes cutting the fiscal deficit, tightening monetary discipline, moving to a more flexible exchange rate and pursuing reforms intended to raise productivity and improve the investment climate. The program also aims to curb monetary financing of the public deficit.
Fuel policy is among the most sensitive elements of the plan, which calls for phasing out government subsidies. The government has said any spending reductions must be paired with safeguards for the most vulnerable groups.
Speaking before the legislature, Economy Minister Christian Morales said the government had inherited an economy with $3.17 billion in net international reserves, of which only $52 million was liquid.
Official projections see reserves climbing to nearly $6 billion by the end of 2026, close to $8 billion by 2028 when the program ends, and around $9.07 billion by 2031. The government also plans to bring the fiscal deficit down from 9.1% of GDP in 2026 to 6.4% in 2027 and 3.8% in 2028.