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Paraguay goes back 12 years and points to inflation as the evil to be attacked

This Thursday a new edition of Basa Nomics was held. On this occasion, the event was held in a special way at the Expo Mariano Roque Alonso 2022.

The speakers were the former Minister of Finance, Santiago Peña, the former head of the Central Bank of Paraguay (BCP), Carlos Fernández Valdovinos, and the former Minister of Finance, Lea Giménez.

On the first occasion, the economist Carlos Fernández Valdovinos stated that 2022 is a complex year within the framework of the global perspective, but he anticipated that 2023 will also be quite complicated.

In this regard, Fernández Valdovinos indicated that one of the biggest drawbacks is the level of inflation, which is why it must be attacked at the root and taken by the Central Banks as a priority.

“The worst poison for an economy is high inflation and that is why it must be attacked at the root with concrete actions,” said Fernández Valdovinos.

For her part, the former Minister of Finance, Lea Giménez, said that there is a significant slowdown in economic and productive activity in the country.

He explained that although Paraguay has not yet entered a line of permanent loss of economic activity, it is already possible to speak of a lasting loss of growth taking into account the level of GDP growth and the high level of inflation that is at 11.5 %.

In that sense, he cited as elements that influence the loss of growth: the high prices of products, mainly in the basic basket and the increase in workers with labor problems, as the case of greater precariousness of income and therefore, a fall in purchasing power.

“The purchasing capacity in Paraguay has gone back 12 years. Paraguay, a country that needs to grow, has gone back 12 years. It’s too much of a setback,” he said.

To conclude, the former minister and candidate for the Presidency, Santiago Peña, stated that as never before this year the word inflation was in all the analyzes referring to the economic sphere. “We understand that there has been a delay in making decisions and that the process became more painful than it could have been,” he said.

Peña indicated that Paraguay is, along with Chile and Brazil, in the group of countries with the highest level of inflation in the region.

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