LA PAZ, Nov 26, 2025 (BSS/AFP) - The new center-right government in Bolivia said Tuesday it is targeting 30 percent reductions in spending and tax cuts to stabilize the economy when it proposes its budget in February.

Pro-business conservative President Rodrigo Paz took office earlier this month, ending nearly 20 years of socialist government under Evo Morales and Luis Arce.

"We will reduce fiscal spending by at least 30 percent by 2026. This involves an exhaustive process of reviewing public spending and reorganizing state institutions," said Jose Gabriel Espinoza, minister of the economy, during a press conference alongside Paz.

He added the new government's proposal to congress will be a "massive reduction" representing four percentage points of the landlocked South American country's GDP.

Bolivia is in the grips of an economic crisis, with year-on-year inflation at 23 percent and a chronic shortage of fuel.

One of Paz's main challenges at the start of his tenure will be to find a way out of the fuel crisis and overcome a severe shortage of dollars -- the result of large government subsidies and a decrease in gas exports -- while curbing an uptick in the cost of living.