Bolivia: Plans Payroll Cuts and Deficit Reduction | Prevé recorte de planillas y baja del déficit

By Opinion:

Government Plans to Cut Payrolls by 30% and Fiscal Deficit to Around 7%

In its two-month management report, the Ministry of Economy highlighted that “the fuel subsidy was eliminated, which allowed savings of 240 million dollars.”

El ministro de Economía, Gabriel Espinoza, durante la presentación de su informe./ MINISTERIO DE ECONOMÍA
The Minister of Economy, Gabriel Espinoza, during the presentation of his report. / MINISTRY OF ECONOMY

The Ministry of Economy reported this Tuesday that, thanks to the elimination of fuel subsidies, the State has already saved 240 million dollars and also aims to reduce its payrolls by up to 30% as another measure to decrease the fiscal deficit, reported the portal Oxígeno.bo.

In its two-month management report, the Ministry stressed that “the fuel subsidy was eliminated by decree. In 22 days of application of the measure, the State saved close to 240 million dollars.”

It also notes that “fuel supply has been guaranteed” in the country. “As of February there are up to 6 days of gasoline stock and 4.5 days of diesel stock.”

Likewise, the Ministry assured that “the exchange rate has been stabilized and a reference value for the dollar has been established.”

In the document, the Ministry also makes known the plans and objectives it has for the current term.

In that regard, it states that the fiscal deficit is expected to be reduced to around 7% of GDP, and by 2027 to 3% or 4% of GDP.

“This reduction will be achieved, in part, through a significant decrease in fuel spending and the reorganization of salary expenditures in the central government, including a reduction of payrolls by 25% to 30% through the elimination of ghost positions and irregularities,” the report states.

Regarding inflation, the expectation is to close 2026 with inflation between 12% and 17%, taking into account that inflation at the end of 2025 was close to 20.5%. For 2027, if the current economic policy line is maintained, an increase in GDP growth of 3% to 4% is projected and single-digit inflation.

RIN
The president of the Central Bank of Bolivia (BCB), David Espinoza, reported that Bolivia closed 2025 with USD 3.713 billion in reserves, mostly in gold, amounting to USD 3.133 billion equivalent to 22.3 tons.

He also explained that liquid reserves as of December 31, 2025 totaled USD 580 million.

“We already have 580 million available; the previous government left us with 70 million (…) There has been significant growth; we have grown in foreign-currency reserves as a result of debt disbursements,” he said.

PAY CUT

As a form of savings for the State, Unity senator Nilton Condori publicly suggested that the salary of assembly members should be reduced from 23,000 to 10,000 bolivianos, considering that they do nothing in the Legislature.

The controversy arose after some lawmakers announced that they would give up the phone chip with 600 bolivianos in credit provided by the Assembly.

Condori said he laughs at that initiative, because in reality deputies’ and senators’ salaries should be cut to 10,000 bolivianos.

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