Paraguay Economic Forecast

Paraguay Economic Outlook

July 9, 2019

Recently released GDP data revealed that output fell at the sharpest pace in over six years in the first quarter (Q1 2019: -2.0% year-on-year; Q4 2018: +1.0 yoy). Although public expenditure picked up, household consumption dipped for the first time in nearly a decade while capital spending contracted sharply, mainly due to lower investment in machinery and equipment. Exports also fell notably as adverse weather conditions battered soy and beef production, while imports stagnated amid the downturn in domestic demand. Going forward, available metrics suggest that weakness persisted in the second quarter. Economic activity declined for the fifth month running in April, largely reflecting depressed soy production which in turn has severely impacted the external sector as highlighted by plunging merchandise exports in both April and May.

Paraguay Economic Growth

The economy is seen losing pace this year, primarily due to a more challenging external backdrop. In particular, the U.S.-China trade conflict and the ongoing crisis in Argentina and disappointing activity in Brazil—Paraguay’s main trading partners—are set to weigh on key export industries. FocusEconomics panelists expect growth of 2.8% in 2019, which is down 0.5 percentage points from last month’s estimate, and 3.8% in 2020.

Paraguay Economy Data

Population (million)
GDP per capita (USD)5,8916,0475,3485,2485,596
GDP (USD bn)38.640.336.136.038.9
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)7.97.1-
Industrial Production (annual variation in %)-  -  -  -  -  
Unemployment Rate5.
Fiscal Balance (% of GDP)-1.3-0.9-1.3-1.1-1.1
Public Debt (% of GDP)10.813.515.117.318.2
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Benchmark Interest Rate (%)11.488.969.638.577.81
Exchange Rate (vs USD)4,5984,6365,7825,8485,588
Exchange Rate (vs USD, aop)4,3154,4655,2105,6835,632
Current Account (% of GDP)1.6-0.1-
Current Account Balance (USD bn)0.6-0.1-
Trade Balance (USD billion)
Exports (USD billion)13.613.
Imports (USD billion)11.912.110.39.811.5
Exports (annual variation in %)16.8-3.7-15.37.911.9
Imports (annual variation in %)7.71.2-14.7-5.117.9
International Reserves (USD)
External Debt (% of GDP)40.741.044.645.141.3

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Paraguay Facts

Exchange Rate6,0400.18 %Jul 11

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