Heads of state from Iran, Venezuela, Spain, Chile, Argentina, Paraguay and Colombia attended Sunday's swearing-in ceremony that was held in the capital La Paz.
"We have before us the great challenge of rebuilding our economy again, of generating certainty, of generating growth," Arce told an assembly of lawmakers and guests in Congress alongside his Vice-President, David Choquehuanca.
He also pledged to "defeat" the coronavirus pandemic in the country, which has one of the worst death tolls per capita.
The new president promised to try to heal political rifts and "put an end to fear" after the deadly violence that erupted in the wake of last year's election.
“The left is not defeated in Bolivia – on the contrary, we have a new opportunity now to work for the Bolivian people,” he added.