Bolivia's market sentiment indicates that the country is likely to adopt an IMF program to stabilize its struggling economy, despite initial reluctance from President-elect Paz, with discussions having taken place before his election.

Economists stress that swift fiscal and exchange rate reforms are crucial, but public support remains uncertain, which could pose risks to economic stabilization.

Analysts from Citi suggest Bolivia's economic restructuring hinges on how quickly Paz will seek IMF support, emphasizing that engagement appears inevitable given the country's dire economic conditions.

Paz's victory marks a major political shift, ending nearly two decades of MAS governance, with his platform focused on maintaining social programs while promoting private sector growth.

The country faces severe economic challenges, including high inflation not seen since the 1980s, a fiscal deficit around 10% of GDP, depleted foreign reserves, and declining gas exports, leading to a significant currency discount.

Paz will assume office on November 8 and must navigate a fragmented but more ideologically aligned legislature, likely requiring alliances with pro-business and right-leaning parties.

Political tensions could arise from the influence of former socialist president Evo Morales, potentially leading to street pressure during the economic adjustment process.

While Paz's moderate platform aims to balance social programs with private sector growth, economists warn that these measures may not be enough to address Bolivia's economic crisis.

Market optimism is reflected in the rebound of Bolivia's international bonds, which have recovered from lows to around 82.5-85 cents on the dollar, indicating cautious investor confidence.

Investors welcomed Paz's election as a positive change after years of MAS rule but remain concerned about economic stability and the potential need for IMF support.

Bolivia faces urgent financial pressures, including approximately $380 million in debt payments due by March, which could trigger a deeper crisis if not managed with aggressive fiscal and currency reforms.

Gaining public support for necessary reforms, including austerity and currency realignment, will be a key challenge for Paz, with potential political tensions ahead.