Paraguay to grow 5% this year and 3.7% in 2022 – Central Bank

RIO DE JANEIRO, BRAZIL – The Central Bank stated that the economy will grow 5%, from the 4.5% projected, while it expects the economy to expand up to 3.7% in 2022.

The BCP states that in 2021 inflation will close at 7.1%, while next year it will again return to 4.5%.

The report came this morning by the institution’s president José Cantero, as part of its annual year-end event, where for the first time the economic outlook for next year is released, and the scenario for the current year is confirmed. The event was called “Economic consolidation in an environment of macroeconomic convergence.”

The BCP presentation followed a speech by Minister of Finance Óscar Llamosas and the Inter-American Development Bank (IDB) Vice-President for countries Richard Martínez.

The conference was held in person and online, after a year without an in-person event because of the pandemic. However, it had a very low physical turnout, when in the past it was full.

“The 2020 scenario was different in terms of economic drivers compared to this year. The agricultural driver did well, but when compared to last year, there was a retraction. The livestock sector is also moderate, and this year’s feature is that construction, which grew 9% in 2020, will expand 13%, mainly driven by the private sector, while the public sector shows a moderation,” he said.

The bulk of the economy, mainly the “drivers” of the private sector, is accelerating, so this is very good news, he said. On the demand side, Cantero said that private consumption is also in tune with the consumer and investments, which are the main drivers.

“Therefore, the BCP was projecting 4% at the beginning, then it increased to 4.5%, and with all these dynamics observed in recent times, we are now at 5%,” he added.

FISCAL YEAR 2022

For the following 2022 fiscal year, the BCP forecasts dynamics for most sectors, such as livestock, which will increasingly expand towards its potential, although there will be a moderation in the construction sector.

“We will probably have more information from the energy sector, which has been declining for 3 years. There is a slightly positive growth within projections. While the services sector will continue to expand,” he clarified.

Cantero said that Paraguay’s 3.7% growth in 2022 will be in line with the expansion of more dynamic countries in the region.