Law No. 1613 of the General State Budget (PGE) 2025 provides an ambitious economic and fiscal framework for the year, with several elements relevant to the context of the Bolivian economy. From a critical perspective, the following points can be highlighted:

1.� �Budget Size and Fiscal Sustainability

• Approved Amounts: The aggregate budget is set at Bs369.34 billion, while the consolidated figure reaches Bs296.57 billion. This represents a significant increase compared to previous years, reflecting a focus on investment and public spending.
• Public Debt: The Ministry of Economy and Public Finance is authorized to issue external debt of up to USD 3 billion, along with contingent credit lines from CAF amounting to USD 400 million. While these measures aim to cover fiscal deficits and fund key projects, they increase public debt, which could strain state finances if not accompanied by sustained economic growth.

2.� �Industrialization and Import Substitution

• Tax Incentives: Exemptions from VAT for importing capital goods in strategic sectors such as agriculture, industry, construction, and mining, coupled with measures to support national production. This aligns with Bolivia industrialization policies but raises questions about effective implementation and the risk of dependence on imported inputs.

3. �Investment Incentives and Tax Relief

• Profit Reinvestment: Exemption from the Corporate Income Tax (IUE) for shareholders reinvesting their profits. While intended to encourage investment, this measure may primarily benefit large companies and may not guarantee a direct impact on employment or small business growth.
• Tax Facilities: Taxpayers can resume payment plans for overdue tax debts. While this offers financial relief, it risks fostering recurrent non-compliance, necessitating increased oversight that may burden compliant taxpayers.

4.� �Infrastructure Projects

• Montero-Bulo Bulo Railway: Resources have been allocated to complete this key territorial and commercial connection project. However, its execution depends on effectively recovering funds and securing guarantees, potentially delaying its completion.

5.� �Hydrocarbons and Energy

• VAT Exemption for Hydrocarbons: While aimed at mitigating import costs, this could increase reliance on fossil fuel imports, countering energy transition goals.
• Biodiesel Production: Tax exemptions for biodiesel production represent a step toward renewable energy, but their impact hinges on local capacity for production scale-up.

6.� �Food Supply and Price Control

• Provisions to prevent the hoarding and price hikes of essential foods are crucial to protecting the most vulnerable. However, successful implementation requires a clear regulatory framework and effective monitoring mechanisms.

7.� �Global Criticism

• Economic Sustainability: Increased spending and reliance on external debt present significant risks in a context of low economic growth and high dependence on primary commodities.
• Lack of Productive Diversification: Although there are incentives for industrialization, the budget lacks clear plans to diversify the economy of Bolivia, which heavily relies on hydrocarbons and mining.
• Social Impact: Tax relief measures and support programs must carefully assess their real impact on reducing inequalities and generating sustainable employment.

In summary, although the 2025 General State Budget (PGE) reflects intentions for economic recovery and industrialization, its success will depend on efficient execution, prudent debt management, and complementary policies that promote fiscal sustainability, economic diversification, and social inclusion.

Francisco Javier Nuñez del Prado Medina.
Attorney with over two and a half decades of experience, holding master degrees and postgraduate studies in Economic, Business, and Corporate Law.