Paraguay Current Account Balance (USD bn)

Available data indicates that the economy expanded again in Q4, but at a slower annual rate than in Q3 as growth in the economic activity index softened in the period. From a sectorial standpoint, manufacturing and construction output worsened, while the agricultural and energy sectors remained positive contributors to growth. Meanwhile, lower inflation and unemployment in the period should have supported private consumption. That said, average merchandise exports growth slowed during Q4, dented by a more challenging international backdrop. Shifting to this year, early signs suggest that growth is picking up. Domestic demand seemingly strengthened in January: Imports rebounded, and consumer confidence rose amid lower inflation. Moreover, growth in merchandise exports accelerated in January thanks to higher prices for agricultural commodities.