The International Monetary Fund estimates that Paraguay will experience lower economic growth than initially expected and higher inflation than previously estimated. The change is attributed to drought and war.
Paraguay is likely to experience lower economic growth and higher inflation than previously expected in 2022, says a part of the final statement of the staff of the IMF Mission in Paraguay
The impacts of the drought and the war in Ukraine on the agricultural sector, exports and disposable income are the factors attributed to the reduction in growth and the upward trend in inflation.
The GDP would rise just 0.3%, it could end the year slightly above the ceiling of the target range of the Central Bank of Paraguay of 6%
The results also refer to the services sector, which is described as having some uncertainty, due to the evolution of Covid-19.
On the other hand, the loss of income from exports, including the loss of the second most important market, Russia, which represents 20% of the total. This would lead to a larger external current account deficit.
