Paraguay Economic Forecast

Paraguay Economic Outlook

April 12, 2022

The economy recorded extremely sluggish year-on-year growth in Q4 according to recent data. While consumption and investment grew strongly, exports tumbled, as drought hit exports of energy and important agricultural products such as beef, corn and soybeans. Turning to this year, economic activity growth picked up in January relative to the Q4 average, while authorities removed remaining Covid-19 restrictions in February, boding well for momentum. However, inflation surged in Q1 as a whole, which could have curbed private consumption, while ongoing drought likely continued to hamper the external sector. The war in Ukraine has created dual forces: Though the conflict has raised prices for Paraguay’s key exports, it could also stoke domestic inflation and lead to fertilizer shortages.

Paraguay Economic Growth

This year, economic growth is seen slowing sharply from 2021’s level, amid ongoing drought, higher price pressures and tighter monetary policy. However, the much-reduced impact of the pandemic should provide some support. The possibility of further extreme weather events, an intensification of the war in Ukraine and instability in Argentina and Brazil are key risks. FocusEconomics panelists foresee the economy expanding 2.2% in 2022, which is down 0.8 percentage points from last month’s estimate, and 4.3% in 2023.

Paraguay Economy Data

2015 2016 2017 2018 2019
Population (million)6.86.97.07.17.2
GDP per capita (USD)5,3485,2485,5965,7275,335
GDP (USD bn)36.136.038.940.438.2
Economic Growth (GDP, annual variation in %)3.14.35.03.40.0
Domestic Demand (annual variation in %)2.31.55.95.80.7
Consumption (annual variation in %)3.83.24.24.11.9
Investment (annual variation in %)-2.12.05.96.9-6.6
Industrial Production (annual variation in %)-  -  -  -  -  
Unemployment Rate5.46.05.25.65.7
Fiscal Balance (% of GDP)-1.3-1.1-1.1-1.3-2.8
Public Debt (% of GDP)15.117.318.219.421.3
Money (annual variation in %)5.88.116.46.16.3
Inflation Rate (CPI, annual variation in %, eop)3.13.94.53.22.8
Inflation Rate (CPI, annual variation in %)3.14.13.64.02.8
Inflation (PPI, annual variation in %)5.04.22.02.31.1
Benchmark Interest Rate (%)9.638.577.818.58-  
Exchange Rate (vs USD)5,7825,8485,5885,9616,453
Exchange Rate (vs USD, aop)5,2105,6835,6325,7316,238
Current Account (% of GDP)-0.43.63.1-0.2-1.2
Current Account Balance (USD bn)-0.11.31.2-0.1-0.4
Trade Balance (USD billion)0.82.21.90.80.5
Exports (USD billion)11.112.013.413.712.7
Imports (USD billion)10.39.811.512.912.2
Exports (annual variation in %)-15.37.911.92.5-7.6
Imports (annual variation in %)-14.7-5.117.912.0-5.2
International Reserves (USD)6.27.18.18.08.0
External Debt (% of GDP)44.645.140.939.1-  

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Paraguay Facts

Value Change Date
Exchange Rate6,4530.18 %Jan 01

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