Bolivia - Market OverviewBolivia - Market Overview
Top Five Reasons to Consider Bolivia
The Bolivian economy is still growing. For the the past ten years, the economy has grown by nearly five percent annually and Bolivia’s growth rates have led South America for each of the past five years. This has led to a dramatic increase in the size and purchasing power of an emergent middle class.
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. Mining and hydrocarbons are some of Bolivia’s largest export sectors, 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 will continue to grow. But in order to do so, Bolivian businesses will need new technology in products
ranging from irrigation to farm equipment. The Bolivian government is also considering allowing the use of bioengineered crops in order to increase production.
The Bolivian government wants to promote Foreign Direct Investment (FDI). Some of President Evo Morales’ cabinet and advisors appear to understand that increasing FDI will be key to sustaining the country’s economic growth.
For the five year period from 2013 to 2018, Bolivia’s economy grew at an average yearly rate of 5.1 percent. This compares favorably to the 4.5 percent average yearly growth between 2009 and 2012. The 2018 increase in GDP resulted from a 7.6 percent growth in agriculture, 5.2 percent growth in transport and telecommunications, 5.1 percent growth in commercial activities, 5 percent growth in construction, 4.8 percent growth in financial services, and 4.8 percent growth in government consumption.
|Nominal GDP||$37.8 billion||$40.6 billion|
|GDP Real Annual Growth Rate||4.2 percent||4.2 percent|
|GDP per capita (PPP)||$7,576||$7,680|
|GDP per capita||$3,393||$3,644|
|Exports||$8.2 billion||$9.0 billion|
|Imports||$9.3 billion||$10.0 billion|
|Total Imports from the United States||$0.6 billion||$0.7 billion|
|Inflation||2.7 percent||1.5 percent|
Source: National Bureau of Statistics (INE) and International Monetary Fund
Accumulated inflation for 2018 was 1.5 percent, more than one percent below the 2017 figure. Inflation was primarly due to increases in food prices. The Central Bank estimates that the inflation rate in 2019 will approach four percent.
Total investment in Bolivia decreased in 2018, from $8.4 billion in 2017 to $8.0 billion this past year. Public investment decreased from $5.5 billion in 2017 to $5.1 billion in 2018, due primarily to decreased investment by state-run companies, particularly in the energy sector. Net FDI dropped from $713 million in 2017 to $256 million in 2018.
Total Bolivian exports increased by 9.5 percent in 2018, reaching $8.9 billion, primarily due to a continued recovery in commodity prices, especially for Bolivian natural gas exports. In 2018, the top export sectors were hydrocarbons (35 percent), manufactured goods (31 percent), minerals (29 percent), and agricultural products (four percent). By product, the top 2018 exports include natural gas (34 percent), zinc (19 percent), gold (13 percent), silver (seven percent) soy (six percent), and tin (three percent).
Bolivia’s top 2018 export markets were Brazil (18.0 percent), Argentina (17.5 percent), South Korea (9.3 percent), India (7.8 percent), Japan (6.8 percent)and the United States (5.0 percent) .
From 2017 to 2018, Bolivian imports increased by 7.9 percent to $10.0 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 were capital goods (24 percent), transport equipment and parts (15 percent), fuel (13 percent), consumable goods (12 percent) and food (seven percent). Top import products within these categories were machinery and mechanical applicances, chemical products, vehicles, fuels and oils, food, and minerals. Bolivia also imports significant quantities of steel, electrical machinery equipment and parts, and plastics and plastic products.