Paraguay Economic Forecast

Paraguay Economic Outlook

April 9, 2019

Recently-released national accounts data revealed the economy ended 2018 on a soft note, with annual growth edging down to a near three-year low of 1.2% in Q4 from an already-weak 1.4% in Q3. The moderation was largely driven by cooling domestic demand, which saw public spending lose traction and fixed investment contract yet again in Q4. A strong rebound in exports, however, cushioned the downturn. Turning to 2019, available data suggests subdued dynamics persisted at the start of the year. Economic activity tumbled in January for the second month running, mainly due to lower agricultural production, while goods exports barely grew in February, reflecting a marked reduction in shipments of soy products.

Paraguay Economic Growth

The economy is expected to gain momentum this year, largely on the back of stronger private consumption and fixed investment growth. Downside risks to the outlook are mainly external, in which weaker-than-anticipated growth in Argentina or Brazil and lower agricultural commodity prices could dent overall activity. FocusEconomics panelists expect growth of 3.9% in 2019, which is down 0.2 percentage points from last month’s estimate, and 3.8% in 2020.

Paraguay Economy Data

20132014201520162017
Population (million)6.66.76.86.97.0
GDP per capita (USD)4,4224,6364,0343,9924,233
GDP (USD bn)29.030.927.327.429.4
Economic Growth (GDP, annual variation in %)14.04.73.04.04.3
Domestic Demand (annual variation in %)7.45.32.6-  -  
Consumption (annual variation in %)4.53.81.90.9-  
Investment (annual variation in %)11.98.82.07.911.5
Industrial Production (annual variation in %)-  -  -  -  -  
Unemployment Rate7.96.55.57.4-  
Fiscal Balance (% of GDP)-1.7-1.1-1.7-1.5-1.5
Public Debt (% of GDP)14.417.620.022.824.1
Money (annual variation in %)17.57.85.88.116.4
Inflation Rate (CPI, annual variation in %, eop)3.84.23.13.94.5
Inflation Rate (CPI, annual variation in %)2.75.03.14.13.6
Inflation (PPI, annual variation in %)2.90.15.04.2-  
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)2.1-0.2-1.11.5-1.3
Current Account Balance (USD bn)0.6-0.1-0.30.4-0.4
Trade Balance (USD billion)1.71.00.61.40.6
Exports (USD billion)13.613.110.911.212.1
Imports (USD billion)11.912.110.39.811.5
Exports (annual variation in %)16.7-3.7-16.62.18.3
Imports (annual variation in %)7.81.1-14.6-5.117.7
International Reserves (USD)5.96.96.27.16.7
External Debt (% of GDP)54.253.459.259.6-  

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Paraguay Facts

ValueChangeDate
Exchange Rate6,2080.18 %Apr 12

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