Paraguay poised for highest economic growth in South America, World Bank reports

In its latest “World Economic” report, the World Bank predicts Paraguay will achieve a robust economic growth of 4.8 percent for the current year.

The forecasts for 2024 and 2025 are also promising, with an anticipated growth rate of 4.3 percent.

This growth projection places Paraguay, a landlocked nation in South America, at the forefront of economic growth in the Southern Cone region, significantly outpacing the regional average growth of roughly 1.5 percent this year.

In contrast, neighboring countries exhibit more modest forecasts.

Argentina’s economy is expected to shrink by 2 percent this year, followed by a 2.3 percent recovery in the subsequent year.

Brazil’s projected growth rate stands at 1.2 percent for this year, 1.4 percent in 2024, and 2.4 percent in 2025.

Uruguay’s economy is predicted to expand by 1.8 percent this year, 2.8 percent in 2024, and 2.4 percent in 2025.

Bolivia’s economic growth is also predicted to hover around 2 percent.

However, these promising forecasts are not without risks. Potential obstacles include possible depreciation of Latin American and Caribbean currencies against those of advanced economies, a scenario that could raise debt service costs and drive up local inflation rates.

Another risk involves China’s real estate sector, whose further weakening could affect metal prices, especially copper and iron ore, thereby posing a threat to economies such as Brazil, Chile, and Peru.

Climate change also continues to pose risks to the region with phenomena like Argentina’s droughts or Colombia’s excessive rainfall increasing the probability of extreme weather events like “La Niña” or “El Niño”.

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