Bolivia’s international bonds are rallying ahead of a contentious presidential election, with hopes of a turnaround to stabilize the economic crisis. Citigroup upgraded Bolivian bonds to “neutral” as they have surged over 30% this year. A potential IMF program could avoid debt restructuring as the country faces a fiscal squeeze.

The election is crucial for Bolivia’s struggling economy. With dwindling gas export revenues and high fiscal deficits, the country’s reserves are at a record low. Credit rating agencies downgraded Bolivia’s rating, citing debt repayment concerns. An IMF loan program could bring relief but requires significant reforms, including lifting capital controls and phasing out fuel subsidies.

Investors remain cautious as political infighting and falling gas export revenues threaten Bolivia’s ability to meet upcoming debt payments. The country’s external debt stands at $13.3 billion, with reserves below recommended levels. Loans from official lenders and monetizing lithium deposits could provide some relief. An IMF loan program would be a significant boost, but painful reforms are necessary for economic growth.

Read more at Yahoo Finance: Analysis-Investors betting voters in Bolivia will make a turn to the right