[18] Driven largely by its natural resources, Bolivia has become a region leader in measures of economic growth, fiscal stability and foreign reserves,[19] although it remains a historically poor country.

[20] Rampant inflation and corruption previously created development challenges,[20] but in the early twenty-first century the fundamentals of its economy showed unexpected improvement, leading Moody's Investors Service to upgrade Bolivia's economic rating in 2010 from B2 to B1.

[20] Between 2006 and 2019 (term of the presidency of the democratic socialist Evo Morales), GDP per capita doubled and the extreme poverty rate declined from 38% to 18%.

Parallel legislative reforms have locked into place market-liberal policies, especially in the hydrocarbon and telecommunication sectors, that have encouraged private investment.

[31][32] Amidst Bolivia's nationwide economic collapse and growing national unrest over the state of the economy, the Bolivian government was forced to withdraw the water contract.

External creditors have been willing to do this because the Bolivian government has generally achieved the monetary and fiscal targets set by IMF programs since 1987, though economic crises have undercut Bolivia's normally good record.

However, by 2013 the foreign assistance is just a fraction of the government budget thanks to tax collection mainly from the profitable exports to Brazil and Argentina of natural gas.

In 1996 three units of the Bolivian state oil corporation (YPFB) involved in hydrocarbon exploration, production, and transportation were capitalized, facilitating the construction of a gas pipeline to Brazil.

The government has a long-term sales agreement to sell 30 million cubic metres a day (MMcmd) of natural gas to Brazil through 2019.

Bolivia has the second-largest natural gas reserves in South America, and its current domestic use and exports to Brazil account for just a small portion of its potential production.

According to the data of the International Monetary Fund, the World Bank, as well as several international Institutes such as ECLAC, during the period 2006 to 2019 (period of the presidency of Evo Morales and Alvaro Garcia Linera) the economy of Bolivia quadrupled from a value of 9,573 million dollars to 42,401 million dollars, this is due in large part to the policy of nationalization of Natural Resources, the stability of the exchange rate, the incentive of the domestic market, strong public investment in infrastructure and industrialization of natural resources such as gas and lithium.

[20] The tax was used to establish the Forestry Stewardship Council, which has been only minimally successful in forest restoration efforts and eliminating illegal logging.

Small village economy stumbled and dwindled from the late twentieth century due to aggravating environmental problems including deforestation and consequent soil degradation,[39] water pollution, loss of biodiversity, and so on.

Besides, political and social problems also greatly obstruct the growth of small village development: political turmoil, post-civil war predicament and burgeoning fiscal deficit have strangled most investment incentives;[40] corruption and manipulation of water supply by foreign companies have greatly undermined the availability and efficiency of local market, leaving little profits for village farmers and producers.

[41] Furthermore, the global market poses a threat to the stability and sustainability of Bolivia's frail economy: "a drop in export prices, reduction of informal trade" and low-skilled over-homogenized local products have further worsened the bleak condition of Bolivia's microeconomic activities, making it almost impossible for village farms and factories to make a living from trading with the world.

[51] These large deposits are located in desert regions farmed by indigenous groups, who claim their share of the profits made from their natural resources.

[52] Mining the mineral deposits would involve disturbing the country's salt flats (called Salar de Uyuni), an important natural feature which boosts tourism in the region.

[54][55] Also, the Bolivian government signed intentions to develop not only lithium extraction but also lithium-ion battery production with numerous countries, especially from the Asia Pacific region.

There has been some growth in publicly owned manufacturing during the presidency of Luis Arce, with Bolivia opening an açai berry processing plant in 2021.

The largest concentration of textile mills are to be found in La Paz, but also in Santa Cruz and Cochabamba and to a lesser extent in Oruro.

[20] Bolivia's spectacular vistas and natural attractions have not been enough to transform the country into a major tourist destination because of its political instability and lack of first-class accommodations.

The final products are vehicle gasoline, liquid propane and butane, jet fuel, diesel oil and lubricants for use in industrial machinery.

[20] President Gonzalo Sánchez de Lozada ultimately resigned over his plan to export natural gas to the United States and Mexico in 2003.

[20] On 6 June 2005, former president Carlos Mesa offered his resignation to the Bolivian Congress after months of demonstrations by Bolivia's indigenous population calling for renationalizing the natural gas and oil sectors.

[20] On 1 May 2006, his successor, former president Morales, signed a decree stating that all natural gas reserves were to be nationalized, recovering ownership, possession and control of hydrocarbons.

[65] The electricity coverage in rural areas is with 30%[66] among the lowest in Latin America and improving it represents a major challenge in the future and requires the joint efforts from both the public and private sectors.

The economic downturn of the late 1990s, coupled with privatization and austerity efforts led by President Mesa, resulted in significant unemployment.

[20] Bolivia has actively sought to foster economic connections in South America after long relying on the United States as its primary trade partner.

[74] By 2004 Bolivia had become the market leader in the export of brazil nuts,[75] with thousands of local people involved in collecting the pods in Bolivian Amazonia.

Bolivia was one of three countries in the Western hemisphere selected for eligibility for the Millennium Challenge Account and is participating as an observer in free trade agreement negotiations.