The economy of Bolivia has had a historic pattern of a single-commodity focus. From silver to tin to coca, Bolivia has enjoyed only occasional periods of economic diversification.

Political instability and difficult topography have constrained efforts to modernize the agricultural sector.

Similarly, relatively low population growth coupled with low life expectancy and high incidence of disease has kept the labor supply in flux and prevented industries from flourishing.

Rampant inflation and corruption also have thwarted development.

The mining industry, especially the extraction of natural gas and zinc, currently dominates Bolivia’s export economy

Macroeconomy

Bolivia had an estimated GDP of US$22.3 billion in 2004, with a growth rate from the previous year of 3.7 percent. Bolivia experienced a budget deficit of about US$500 million in 2004. Expenditures were nearly US$2.8 billion while revenues amounted to only about US$2.3 billion.

Inflation has plagued, and at times crippled, the Bolivian economy since the 1970s. At one time in 1985, Bolivia experienced an inflation rate of more than 20,000 percent.

Fiscal and monetary reform reduced the inflation rate to single digits by the 1990s, and in 2004 Bolivia experienced a manageable 4.9 percent rate of inflation.

In 2008 the GDP (official exchange rate) was $18.94 billion.