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Bolivia faces surge in inflation as gas output declines and fuel shortages hit

Inflation has climbed to its highest level in more than three decades, with some imported staples in La Paz reportedly doubling in price amid dollar shortages and fuel scarcity.

Reported · Written up by our desk · Emerging Markets

Bolivia is grappling with a deepening economic crisis marked by dollar shortages, fuel scarcity, and mass unrest, pushing inflation to its highest level in more than three decades, according to the Guardian Economics. The country’s downturn is linked to the collapse of a fossil gas boom that previously powered growth from 2006 to 2014, a period during which then-president Evo Morales boosted public spending, expanded social programs, and helped cut poverty rates. As global commodity prices fell and gas reserves began to run down, Bolivia’s economic momentum faded and inflation rose sharply. In La Paz, the article says some imported staples have doubled in price, and merchants report that high prices are pushing consumers to buy less and switch to cheaper options, while wages are not keeping pace. It also cites Bolivia’s long reliance on gas as central to the crisis, pointing to failures to discover new fields, costly subsidies, and capital flight. The Guardian Economics adds that while more sustainable alternatives exist, extractive interests and extractive lobbies have hindered efforts to diversify the economy beyond hydrocarbons, leaving Bolivia exposed as its traditional fuel base declines.

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