President Paz defends fiscal adjustment and subsidy cuts as the path to putting Bolivia’s economy in order

President Rodrigo Paz defended Bolivia’s fiscal adjustment at the Cainco Economic Forum 2026, presenting lower spending and reduced fuel subsidies as necessary measures to restore the state’s finances.

Paz said the fiscal deficit had stood near 16% and that his government aimed to bring it down progressively to 9%. He compared the process with lowering cholesterol, arguing that an adjustment of this size could not happen overnight. He also said the government had reduced capital contributions to public companies, brought transfers to their subsidiaries to zero this year and cut current spending.

The president highlighted the way the deficit was financed. He said the Treasury had received no credit from the Central Bank of Bolivia during the year, describing the policy as a sign of fiscal discipline.

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Every dollar paid for something that is not sustainable is money that does not even stay in Bolivia.

Fuel subsidies formed a central part of his presentation. Paz argued that the subsidy had become unsustainable and that some of the money ultimately supported fuel smuggling to neighboring countries. “Every dollar paid for something that is not sustainable is money that does not even stay in Bolivia,” he said. He framed the choice as “subsidy or the future,” contrasting fuel support with the need to finance hospitals, schools and roads.

Paz acknowledged that reducing or ending the subsidy had caused a supply crisis. He attributed part of the difficulty to external factors, including international conflicts that altered conditions in global energy markets. His government now plans to move gradually toward liberalized fuel imports, allowing productive sectors to manage their supplies directly and reducing their reliance on state intermediaries.

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Subsidy or the future.