Law No. 1765, promulgated on 18 September 2026, contains a single article and an additional provision. It approves borrowing from the International Monetary Fund of SDR 1,369 million under the Extended Fund Facility, authorises the National Treasury to service the debt and instructs the Ministry of Economy and Public Finance to formalise the operation and report to the Plurinational Legislative Assembly every six months. So far, an ordinary borrowing law. What sets it apart is one clause in paragraph I: the programme’s terms are described “in the Annex, which forms an integral part of this Law”.
That annex is the Memorandum of Economic and Financial Policies negotiated with Fund staff between May and July. Forty paragraphs and two tables of targets set out the reforms committed to through 2029, with dates attached. For anyone preparing a company budget, this is the part worth reading closely.
Three milestones for planning 2027
- Fuel: the removal of the diesel subsidy has already been brought forward under Supreme Decree No. 5716. January remains the programme’s reference date for removing the remaining fuel subsidies.
- March: the government must share its tax and customs strategy with the IMF. This is not yet a date for new taxes to take effect.
- June: the memorandum places the removal of lending-rate caps and credit quotas within this timeframe, as part of the revision of the Financial Services Law.
The diesel change is already in force. Businesses will need to track the legislation implementing the remaining commitments and any changes agreed during programme reviews.
The law changes where the promises are recorded and raises the political cost of departing from them.
Why the annex matters
Incorporating the memorandum into legislation changes where the promises are recorded. Commitments usually found in IMF programme documents now also appear in the Official Gazette, within the text approved by the Assembly. The government’s decisions can be measured against that record.
This does not mean every target is directly enforceable by a company, or that the annex replaces the legislation needed to implement the reforms. Performance criteria and structural benchmarks remain programme conditionality assessed by the IMF, and the memorandum allows policies to be recalibrated in response to adverse shocks. Its immediate value to businesses is practical: it provides a written reference against which to judge what the government does.
There is also a constitutional tension. Article 320, paragraph IV, declares the State independent in domestic economic policy and prohibits it from accepting impositions or conditions from foreign financial institutions or multilateral bodies. The law’s additional provision requires the borrowing to comply fully with that rule. The memorandum, meanwhile, states that the reforms are sovereign decisions, not externally imposed measures.
That is the answer the two texts offer, though it does not by itself settle the legal debate. Politically, it leaves limited room to describe the measures later as someone else’s orders: the government has claimed them as its own.
The numbers that frame everything
The memorandum is blunt about the starting position. According to its figures, the fiscal deficit reached 11% of GDP in 2025, Central Bank of Bolivia (BCB) financing amounted to 7% of GDP—approximately USD 4.4 billion—and public debt exceeded 80% of GDP, or 90% at the market exchange rate. Output contracted by 1.6%, in a second year of recession, and liquid reserves were exhausted defending an overvalued peg.
The programme assumes the contraction continues in 2026, bottoms out in 2027 and gives way to growth in 2028. It projects inflation of 14% at the end of 2026 and single digits in 2028. The recovery in 2028 is therefore part of the scenario on which the agreement rests.
The committed adjustment is approximately 8.5% of GDP between 2026 and 2029, with most of the effort coming early. The primary deficit of the non-financial public sector is to be eliminated by the end of the arrangement, and the overall deficit reduced to 3.5% of GDP in 2029. The revised 2026 budget caps the deficit at Bs 47 billion, or 9.3% of GDP; the ceiling for 2027 is Bs 36.8 billion.
Most of the adjustment comes from spending: removing fuel subsidies, restraining the public wage bill and cutting low-priority investment. Major tax measures are deferred to the second and third years, in anticipation of the recovery. The loan, approximately USD 1.9 billion at the Fund’s estimate, would be disbursed in tranches against quarterly reviews, the first scheduled for December 2026.
Fuel: diesel moves ahead of the calendar
For businesses with fleets, generators or thermal processes, the change is no longer waiting until 1 January 2027. Supreme Decree No. 5716, dated 18 September 2026, removed the diesel subsidy and established an initial price of Bs 17.95 per litre, effective from 19 September. The fixed price gives way to an import-parity mechanism. The price remains regulated, but is now linked to the cost of importing the fuel.
The measure supersedes the segmented arrangement under Supreme Decree No. 5676, which had set a reference of Bs 18 for industry, businesses and large consumers, while public transport and small consumers continued to pay Bs 9.80. For those buying at the lower price, the increase is Bs 8.15 per litre, approximately 83%. Businesses already paying Bs 18 have an uncomfortable advantage: they know what that cost does to their margins.
The memorandum retains a broader commitment: the 2027 budget will contain no fuel subsidies, whether from the Treasury or state companies. Removing the diesel subsidy brings forward part of that commitment; it does not mean gasoline subsidies have also disappeared. January still matters for the remaining measures.
The precedent Bolivian executives remember is December 2010. Supreme Decree No. 748 raised regular gasoline from Bs 3.74 to Bs 6.47 a litre and diesel from Bs 3.72 to Bs 6.80. Five days later, No. 759 repealed it following protests.
The memorandum identifies renewed social unrest as a risk of energy reform. Its answer is expanded social protection, including a floor on assistance spending as an indicative target and submission of a legal framework for a unified social registry by March 2027. With the diesel increase already in force, whether support reaches the people who need it, in time, will be critical to sustaining the measure.
For companies, the task is arithmetic, and it can no longer wait until December. Transport and production costs need updating, and fuel-linked clauses in supply, transport and construction contracts deserve immediate review. Bs 17.95 is the starting point, not a guaranteed price for 2027. Budgets must allow for changes in import costs and the exchange rate.
Foreign exchange, interest rates and banks
The second strand affects treasury management. According to the memorandum, the official and reference exchange rates were unified at the end of June, and the country is moving towards a floating regime. As a prior action, the BCB removed Article 6 of its Foreign Exchange Operations Regulation so banks could buy and sell foreign currency at freely negotiated rates.
BCB intervention operates under a “constrained discretion” framework: a daily movement beyond a threshold permits intervention but does not require it. The official rate is to be calculated using a wholesale-market methodology. Direct foreign-exchange provision to state companies is also limited, bringing that demand into the market.
Four continuous commitments accompany the change: no new or intensified exchange restrictions, no new multiple currency practices, no bilateral payment agreements inconsistent with Article VIII of the Fund’s Articles of Agreement, and no import restrictions for balance-of-payments reasons. For importers accustomed to dollar rationing and parallel rates, these are among the annex’s most relevant provisions. They do not promise cheap dollars; they commit the government to rules on market access.
The memorandum also reports that foreign-currency deposits have been returned to small savers, with the remainder being released gradually alongside a two-year wind-down of the CPVIS funds.
The cost of money deserves separate attention. The BCB is replacing the exchange rate as its nominal anchor with monetary base targets under tight conditions. The document explicitly warns of potentially volatile interest rates and higher Treasury funding costs. Removal of lending-rate caps and credit quotas is scheduled within the June 2027 timeframe, as part of the revision of the Financial Services Law. Businesses relying on those facilities should calculate the cost of renewing them on market terms and monitor the legislation that gives effect to the change.
The banking system itself will be examined. Solvency and liquidity stress tests and independent asset quality reviews, beginning with systemic banks, are planned by March 2027, alongside resolution and recovery plans. Reforms covering supervision, bank resolution and deposit protection are due to be submitted to the Assembly by June.
The memorandum acknowledges possible inherited supervisory weaknesses and episodes of regulatory forbearance. That is a reason to review concentrated balances and other banking exposures, though it does not establish that any particular institution has a solvency problem.
Taxes, prices and the rules of the game
The Domestic Resource Mobilisation Strategy, covering tax policy, revenue administration and customs reform, must be shared with the Fund by March 2027. Major measures are envisaged in 2027 and 2028.
The memorandum also establishes a procedural rule: new measures must include a fiscal impact assessment and offsets. The first application is already announced. The 2027 budget will compensate for recent tax relief, including the repeal of Article 9 of Law No. 1755. That does not establish that the relief itself will be reversed; the offset could come from another tax or lower spending. The question is who ultimately bears the cost.
In the real economy, the programme proposes gradually removing price controls and export caps, beginning with food and energy. For hydrocarbons and mining, it announces a review of regulatory and tax frameworks to encourage private exploration while ensuring an adequate central-government share of resource rents. The wording deserves attention: a new framework need not be a lighter one.
The agenda also includes access-to-information legislation, property rights and contract enforcement, a governance diagnostic, virtual-asset regulation and stronger anti-money-laundering measures. Here, the announcements tell businesses less than the legislation that must follow.
One chapter matters particularly to suppliers to the State. The programme envisages auditing arrears owed to domestic suppliers and foreign counterparties, validating claims and establishing a payment strategy with deadlines. The audit covers central government and state companies; subnational governments join on request. Meanwhile, the public wage bill will grow more slowly than nominal GDP, and public investment will be cut and screened through cost-benefit assessments. Companies invoicing the State could gain more certainty about old receivables and see fewer new orders.
What the law cannot promise
At the time of writing, the IMF Executive Board had not formally approved the arrangement. The memorandum lists its own risks: social unrest, international energy prices, delays in external financing, financial vulnerabilities and uncertainty over the full extent of public-sector liabilities. If those risks materialise, it envisages additional fiscal measures and monetary tightening, coordinated with the Fund. The planned adjustment may not be the last.
Law No. 1765 does not guarantee that the calendar will hold. It does change where the promises are recorded and raises the political cost of departing from them. Businesses now have a more explicit reference for their decisions.
Budgets for 2027 should revisit three questions: the cost of operating under the new diesel regime and the pending removal of other subsidies, the cost of renewing credit without rate caps, and the room available to absorb tax changes. January, March and June remain months to mark. But the diesel calculations need updating now.
