Paraguay Economic Forecast

Paraguay Economic Outlook

May 15, 2018

Mario Abdo Benítez and his Colorado Party comfortably won the 22 April general election, maintaining the right-wing party’s longtime grip on power and ensuring continuity of the current government’s business-friendly policies. Abdo’s victory over his main rival, left-leaning Efraín Alegre, is expected to spare the economy any adverse investment shocks. A smaller Colorado minority government will likely soon face pressure to implement an export tax on soybeans, one of the country’s key exports. Meanwhile, efforts to stimulate foreign investment in export industries have been a success for the ruling party; growth in the fourth quarter last year climbed to 4.5% year-on-year amid stronger investment outlays and export gains, and available data suggests another robust outturn in the first quarter.

Paraguay Economic Growth

Stronger agricultural output and upbeat investment should support essential export industries and sustain the economy’s momentum this year. Sound fiscal policy should underpin investor confidence, although widespread poverty and corruption will remain key concerns. FocusEconomics Consensus Forecast analysts expect growth of 3.9% in 2018, unchanged from last month’s estimate, and again in 2019.

Paraguay Economy Data

20132014201520162017
Population (million)6.66.76.86.97.0
GDP per capita (USD)4,4224,6364,0343,994-  
GDP (USD bn)29.030.927.327.4-  
Economic Growth (GDP, annual variation in %)14.64.63.04.1-  
Domestic Demand (annual variation in %)7.45.31.7-  -  
Consumption (annual variation in %)4.53.81.90.9-  
Investment (annual variation in %)11.98.82.06.5-  
Industrial Production (annual variation in %)8.210.3-  -  -  
Unemployment Rate5.06.05.57.4-  
Fiscal Balance (% of GDP)-1.7-1.1-1.7-1.5-  
Public Debt (% of GDP)14.417.619.721.2-  
Money (annual variation in %)17.57.85.88.1-  
Inflation Rate (CPI, annual variation in %, eop)3.84.23.13.9-  
Inflation Rate (CPI, annual variation in %)2.75.03.14.1-  
Inflation (PPI, annual variation in %)2.90.15.04.2-  
Benchmark Interest Rate (%)11.488.969.638.57-  
Exchange Rate (vs USD)4,5984,6365,7825,848-  
Exchange Rate (vs USD, aop)4,3154,4655,2105,683-  
Current Account (% of GDP)2.10.0-1.11.8-  
Current Account Balance (USD bn)0.60.0-0.30.5-  
Trade Balance (USD billion)1.71.00.61.4-  
Exports (USD billion)13.613.110.911.1-  
Imports (USD billion)11.912.110.39.8-  
Exports (annual variation in %)16.7-3.7-16.62.0-  
Imports (annual variation in %)7.81.1-14.6-5.1-  
International Reserves (USD)5.96.96.27.1-  
External Debt (% of GDP)54.153.459.658.9-  

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Paraguay Facts

ValueChangeDate
Exchange Rate5,6320.18 %May 21

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