Public Investment in Bolivia: Prospects and Implications

July 12, 2019

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Yehenew Endegnanew, and Dawit Tessema. Public Investment in Bolivia: Prospects and Implications, (USA: International Monetary Fund, 2019) accessed November 12, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Bolivia’s “Patriotic Agenda 2025” sets targets for social and economic development propelled by state-led industrialization under a five-year development plan (2016–2020). Large-scale public investment has aimed to fill infrastructure gaps and raise productivity to ensure sustained medium-term growth. Pursuit of these goals in a period of lower hydrocarbon revenues has, however, contributed to widening fiscal and external current account deficits. The paper uses a structural model to outline different scenarios for the level of public investment in the face of declining hydrocarbon revenues. It finds that if public investment is sustained at current levels as a share of GDP while hydrocarbon revenues continue to decline, the sustainability of the public debt could be called into question.

Subject: Economic sectors, Expenditure, National accounts, Natural gas sector, Private consumption, Private investment, Public debt, Public investment spending

Keywords: Consolidation path, Deficit, Fiscal Consolidation, GDP, Global, Hydrocarbon revenue projection, Investment, Investment path, Investment-growth nexus, Natural gas sector, Private consumption, Private investment, Public Investment, Public investment spending, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/151
Stock No:

WPIEA2019151
ISBN:

9781498319317
ISSN:

1018-5941

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