Arce faces major economic challenges in Bolivia

Significance

However, he will lack the commodity boom-related revenue that fuelled such programmes. Bolivia has been hit hard by the COVID-19 pandemic; GDP is forecast to contract by between 5-8% in 2020 amid increasing fiscal and external deficits and declining foreign reserves.

Impacts

• Economic stress in key industries will carry over to the financial sector, potentially triggering a need for liquidity support.
• Insecurity could weigh on foreign investment, especially if anti-MAS protests endure or unrest develops over issues such as unemployment.
• A weaker hydrocarbon sector will hit growth, particularly if the country fails to diversify its economy.