Paraguay Economic Outlook
September 14, 2021Conditions continued to improve in Q2 but likely remained challenging, following a milder expansion in GDP in Q1. Activity grew strongly in April–June, but the pace eased at the end of the quarter as the base effect faded. Household credit growth remained solid, but sequentially moderated throughout Q2 and the unemployment rate continued to tick up in the quarter. This, coupled with higher inflation, likely dented household spending somewhat. That said, goods imports and exports grew markedly in Q2—albeit supported by a base effect—signaling healthier demand dynamics. Turning to Q3, credit expanded at a softer pace in July and merchandise exports and imports growth eased in July–August. More positively, infection rates have plunged and the vaccination drive has picked up recently, allowing authorities to loosen some restrictions in August.
Paraguay Economic GrowthGDP should return to growth this year as the vaccination campaign progresses and restrictions are lifted, bolstering domestic demand. Moreover, exports will benefit from the recovery in key trading partners. However, ongoing uncertainty over the evolution of the pandemic and new strains of the virus pose downside risks. FocusEconomics panelists foresee the economy expanding 4.2% in 2021, which is up 0.3 percentage points from last month’s estimate, and 3.9% in 2022.
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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