Paraguay Economic Forecast

Paraguay Economic Outlook

January 15, 2019

The economy lost traction in the third quarter, with annual growth cooling markedly to 1.1%—the weakest pace in two-and-a-half years—from 6.4% in Q2. A disappointing external sector performance, with exports recording the largest annual contraction in over nine years amid a loss of product competitiveness, was primarily behind the slowdown. Available data for the fourth quarter, however, points to somewhat improved dynamics: In October, economic activity swung back to expansion after contracting in year-on-year terms in September, largely reflecting higher electricity production and increased turnover in the retail trade sector.

Paraguay Economic Growth

Although growth is seen slowing this year, it should remain among the strongest in the region on the back of robust domestic demand, particularly private consumption. Weaker-than-expected activity in the region, which threatens to dent export demand, is the key downside risk to the outlook. Met the why particular panelists expect growth of 4.1% in 2019, which is unchanged from last month’s estimate, and 3.9% 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
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)4,3154,4655,2115,6835,632
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)13.613.111.911.212.1
Imports (USD billion)11.912.111.39.811.5
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 Rate6,0700.18 %Jan 21

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