Paraguay Economic Outlook
July 14, 2020The economy was remarkably resilient in the first quarter, underpinned by robust domestic demand, although available indicators show it took a notable hit in the second quarter. GDP expanded 3.5% in annual terms in Q1, matching the fourth quarter’s outturn, sustained by a jump in fixed investment fueled by soaring construction activity, resilient consumer spending and upbeat government consumption. Turning to Q2, however, economic activity tumbled in April, dragged on by a sour showing of the services and manufacturing sectors. Revealing the magnitude of the hit in Q2, merchandise exports plunged throughout the quarter. In response, the government has boosted public infrastructure spending, which should cushion the blow. That said, higher outlays and lower revenues are translating into a sizable widening of the fiscal deficit.
Paraguay Economic GrowthThe health crisis will cause GDP to contract this year, although the country will cope with the crisis better than its regional peers. The external channel is set to be severely affected, which, coupled with elevated uncertainty, will weigh on spending decisions domestically. Downside risks stem from poor management of the health crisis in the region and possible outbreaks. FocusEconomics panelists estimate the economy to contract 2.0% in 2020, which is unchanged from last month’s estimate, before expanding 4.7% in 2021.
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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