Public Investment in Bolivia: Prospects and Implications

Yehenew Endegnanew and Dawit Tessema

No 2019/151, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; GDP; investment; deficit; investment path; investment-growth nexus; Public Investment; Fiscal Consolidation; hydrocarbon revenue projection; consolidation path; Public investment spending; Natural gas sector; Private investment; Private consumption; Global (search for similar items in EconPapers)
Pages: 25
Date: 2019-07-12
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Citations: View citations in EconPapers (4)

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