The Central Bank of Paraguay (BCP) reported this Monday that it lowered its inflation forecast for this year from 8.8% to 8.6%, while maintaining its forecast at 4.1%. on the consumer price index (CPI) for 2023.
This was announced in the Monetary Policy Report corresponding to last September, which maintained the growth expectation of the gross domestic product (GDP) in Paraguay at 0.2% for 2022.
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Regarding inflation, the document highlighted that the moderation of this indicator “was greater than expected.”
“The lower pressures of external prices observed in the third quarter, the moderate dynamism of the local economic activity -negative product gap- and the transmission of the adjustments of the monetary policy rate contributed to contain the acceleration of the domestic inflation in the last period,” the document said.
When evaluating the risk scenarios facing the country, the issuer indicated that in the international environment “the uncertainty surrounding the economic outlook continues, with a clear bias towards a more pessimistic result.”
Among other aspects, the BCP observed the main risk factors: world growth, the most persistent inflationary pressures, the greater deterioration in global financial conditions and a new escalation in the war between Ukraine and Russia.
Already at the local level, the report warned about the risks that the evolution of the climate poses for economic activity.
Despite the improvement in the weather for the BCP, “the chances persist that a drought (“la Niña”) will be registered again in the coming months, which, if it materializes, would have its implications for economic activity, domestic demand , exports and the exchange rate.”
With information from SWI/EFE