Bolivia Inflation Slows as Boliviano Loses Value

In 2026, Bolivia's inflation has slowed significantly, with the year-to-date rate at 3.01%, down from 18.09% a year earlier. August's monthly rate was 1.10%, contributing to the overall decline. The main driver behind the August increase was the price of chicken meat, which rose due to supply shortages from 53 days of blockades at poultry farms.

However, prices began to fall again in the second week of August as supply improved. The previous month saw a rare monthly decline of 2.79%, due to price decreases across several product categories.

Despite the lower inflation, the economy remains fragile due to fuel shortages and a devalued currency. Bolivia has faced repeated fuel shortages throughout 2026, causing long queues for diesel and petrol, which affects transport and food production. The devaluation of the boliviano, which has lost about 45% of its value against the dollar since the government scrapped the fixed exchange rate on June 29, 2026, means that imported goods are more expensive.

While slower inflation helps those earning or saving in bolivianos, the currency devaluation could lead to higher prices for imported goods. Foreigners holding bolivianos should also be concerned about the drop in the currency's value. The consumer price index measures a basket of goods and services but does not account for the impact of fuel shortages on production and transportation costs.

Therefore, the low inflation number may not fully reflect the real cost pressures faced by Bolivians. It is essential to monitor both the inflation rate and the fuel situation to gain a complete understanding of the country's economic situation.