Can the BCB Control Inflation?
Since late 2023, Bolivia has been experiencing an accelerated and widespread inflationary process, with year-on-year inflation reaching 18.46% in May 2025 and sharp increases in both tradable goods —affected by the dual exchange rate— and non-tradables, as well as core inflation. The persistent fiscal deficit, financed by the Central Bank through monetary issuance, has weakened the exchange rate regime, eroded institutional credibility, and limited the BCB's ability to control inflation. Without credible fiscal consolidation and the restoration of the Central Bank's autonomy, inflationary pressures will continue to intensify.
Jun 10, 2025
