Bolivia’s new government is seeking more than $9 billion in multilateral financing to support a mix of public and private sector projects, Economy Minister Jose Gabriel Espinoza said Tuesday, laying out the administration’s most significant economic initiative since President Rodrigo Paz took office earlier this month.
The package, negotiated with a consortium of lenders, exceeds the government’s initial estimate of $4-5 billion and aims to stabilise an economy plagued by high inflation, a widening fiscal deficit, and ongoing foreign currency shortages.
During a news conference, Espinoza stated that around one-third of the financing is projected to arrive in Bolivia during the next 60 to 90 days.
The minister also stated that monies from creditors such as the World Bank and the Development Bank of Latin America (CAF) will be directed toward private-sector projects in infrastructure, renewable energy, and financial inclusion.
The endeavour, he said, underscores a larger shift in the country’s development strategy.
A new role for the private sector
Bolivia has long pursued state-centred economic policies that stress nationalisation and significant public spending.
While these measures increased the government’s control over natural resources, they also discouraged foreign investment and weighed on public finances.
The country, which is one of South America’s largest producers of natural gas and cereals, is currently dealing with one of its most severe economic problems in decades, according to officials.
Espinoza stated that the new loan package is intended not just to address immediate macroeconomic pressures, but also to bring a more balanced approach to development in which private enterprise plays a larger role.
“It’s not just public sector borrowing,” the politician remarked. “This marks a new phase of development where the private sector will play a very important role.”
President Paz, a centrist who takes office on Nov. 8, has committed to welcoming foreign investment and embracing a more market-oriented posture while avoiding rapid economic modifications that could undermine the country’s social programs.
His administration regards multilateral funding as a bridge to rebuild confidence and facilitate a broader economic change.
Tax reform and budget cuts
As part of Tuesday’s statement, the government eliminated Bolivia’s wealth tax, claiming that it had discouraged investment.
Authorities also reduced financial transaction taxes. Both steps require congressional approval to go into effect.
In addition, Espinoza stated that the 2026 budget will be substantially leaner, with a predicted 30% reduction in public spending.
He highlighted that the cut was a domestic policy choice, not a response to IMF pressure.
While Bolivia is open to dialogue with the Fund, he stated that the government wants to proceed with its plans regardless of whether the IMF is involved.
“If they approach us, that is welcome, but in the meantime, we will proceed with our plans,” he told the news publication.
Push to integrate cryptocurrencies
In an effort to modernise the financial system, the government intends to incorporate cryptocurrencies, beginning with stablecoins, into legitimate banking services.
Espinoza stated that banks will be permitted to provide crypto-based goods such as savings accounts, credit cards, and loans.
The goal is for Bitcoin to “begin to function as a legal tender payment instrument,” he explained.
Bolivia has experienced a significant increase in cryptocurrency acceptance since a previous restriction was overturned last year.
As the native currency has declined, more people have turned to digital assets as a hedge.
According to Espinoza, the new framework has the potential to increase financial access while also acknowledging the global nature of cryptocurrency markets.
“You can’t control crypto globally, so you have to recognise it and use it to your advantage,” he told the news agency.
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