Reasons to Consider Bolivia
Strong historical growth
Bolivia’s economy suffered due to the COVID-19 pandemic. GDP in 2020 contracted 8.8%, the worst figure since the 1950s, due to curfews and other restrictions. For the five years prior to the pandemic, 2015 to 2019, Bolivia’s economy grew at an average yearly rate of 4.0 percent, among the highest in the continent. Businesses can capitalize on the economic rebound and increased consumer demand.
Bolivians like American products
Made in the USA generally signals quality and innovation to Bolivian consumers. Bolivians also like to purchase U.S. products due to the status they confer. For larger purchases by local governments, U.S. products and services are viewed as reliable due to customer service standards, warranties, and maintenance plans.
Bolivia is rich in non-renewable natural resources
Raw mining materials, natural gas, and hydrocarbons are some of Bolivia’s largest exports, and there is still room to grow. In addition to presently mined minerals such as zinc, silver, lead, and tin, Bolivia boasts significant lithium deposits, which remain mostly unexploited.
Bolivia’s agricultural sector is the economic bright spot
The agricultural sector has grown exponentially in recent years, even after the onset of the COVID-19 pandemic. But to continue to grow, Bolivian businesses will need new technology in products ranging from irrigation to farm equipment to combat the effects of climate change and aging infrastructure.
Market Statistics
In 2020, all economic sectors, except for agriculture and communications, showed negative growth rates. The mining, construction, transport, oil and gas and manufacturing sectors experienced double digit contractions. The Bolivian government is expecting a continued recovery in 2022, with estimated economic growth of 4.4%. According to the National Statistics Institute (INE), inflation for 2021 was 0.7 percent, an increase from .02 percent in 2020 – the lowest in the Latin American region and among the lowest in the world. The International Monetary Fund (IMF) projects a 3.2 percent inflation rate in 2022, with a steady increase through 2025.
The INE shows nominal GDP increasing from $39.7 billion in 2020 to $40.7 billion in 2021. Real GDP increased from negative 8.8 percent in 2020, to 6.1 percent in 2021. Bolivia had the 102nd highest real GDP per capita out of 149 countries in 2020, with real GDP forecasted to increase through 2025, per Statista. Services accounted for over 50 percent of GDP in 2019. The industrial sector accounted for about 25 percent, and agriculture produced most of the remaining GDP. The INE shows total exports increased 23 percent in 2021, reaching $11.1 billion. The top exports were raw materials, such as scrap metal (26.5 percent) and gold (23 percent), and combustibles—chiefly natural gas (21.3 percent). Other exports include food products (11.5 percent), manufactured goods (6.7 percent), and vegetable oil (6.2 percent). Bolivia’s top 2021 export markets were India (16.7 percent), Brazil (13.0 percent), Argentina (9.3. percent), Japan (8.3 percent), Colombia (6.4 percent), China (5.9 percent), Peru (5.7 percent), and the United States (4.7 percent).
From 2020 to 2021, Bolivian imports increased by 15 percent to $9.6 billion. Thirty percent of Bolivia’s total imports were industrial supplies and inputs, such as replacement parts, chemicals, and other production items. Other major imports include fuel (23.4 percent), capital goods (16 percent), consumable goods (11.8 percent), transport equipment and parts (11.5 percent), and food (6.7 percent). Top import products within these categories include oil refining products and nuclear fuel, chemical products, machinery, mechanical appliances, vehicles and tow trucks, common metals, food, and plastics. Bolivia also imports significant quantities of steel as well as electrical machinery equipment and parts.
Political & Economic Environment: State Department’s website for background on the country’s political environment.