Bolivia's Hidden Unemployment Crisis: Inflation's Devastating Impact

Bolivia Faces Rising Unemployment Amidst Inflationary Pressures Santa Cruz, Bolivia – Economist Fernando Romero, appearing on Eju! TV, warned of a potential surge in unemployment in Bolivia, directly linking it to the ongoing rise in inflation. While official first-trimester 2025 data indicated low unemployment (around 3.9%), Romero highlighted a critical factor often overlooked: the vast informal sector. He stated, "We have the most informal economy in the region, with 85% of the workforce operating outside official channels." This informality makes accurate unemployment figures difficult to assess. Romero explained that as inflation increases, businesses, particularly small and medium-sized enterprises, face immense pressure to cut costs. "Businesses are forced to make difficult choices," he said. "They either raise prices, impacting consumers' ability to buy, or they reduce their workforce." The government, however, maintains a less critical view of the situation. They argue that the impact is not as severe as it appears, as large industries haven't yet experienced widespread closures or layoffs. However, Romero's analysis suggests that the informal sector, which is more vulnerable, is already absorbing the brunt of the economic pressure. The long-term consequences of this trend remain to be seen, but the potential for increased social unrest is a concern. The situation underscores the need for comprehensive economic policies that address both inflation and the challenges faced by the informal economy.