Paraguay Economic Outlook
January 18, 2022The economy continued to grow in Q3, albeit at a slower pace of 3.8% year-on-year, following the prior quarter’s 13.9% expansion. The slowdown was due to a moderation of domestic demand, with private, public and capital spending all growing at softer paces. Still, a tighter labor market and stronger household credit growth likely helped to sustain consumption, despite mounting price pressures in the period. Meanwhile, the external sector weighed on overall growth. Moving to Q4, the recovery will have likely slowed further, as activity grew at the softest pace in eight months in October. More positively, household credit growth picked up to a five-month high in the same month, likely supporting spending. In early January, authorities announced debt refinancing credit lines and tax cuts for agriculture and livestock producers until the end of September, to help them cope with a severe drought.
Paraguay Economic GrowthEconomic growth is seen slowing this year, following 2021’s projected strong bounce-back. The moderation will be partly due to a statistical effect, as robust private and government spending will sustain activity. That said, fairly high public debt levels and extreme weather events such as severe droughts are key downside risks to the outlook. FocusEconomics panelists foresee the economy expanding 3.5% in 2022, which is down 0.1 percentage points from last month’s estimate, and 3.9% in 2023.
Paraguay Economy Data
5 years of Paraguay economic forecasts for more than 30 economic indicators.
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|Exchange Rate||6,453||0.18 %||Jan 01|
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