According to the Central Bank of Paraguay’s April report, headline inflation rose 0.4%, down from 0.8% in April 2024. This result lifted the year-to-date inflation to 3.0%, above last year’s 2.8% pace.
Annual inflation eased to 4.0%, below March’s 4.4% and matching April 2024. Food and beverages contributed 0.5 percentage points to the monthly rise. Beef and poultry prices climbed, and tomatoes spiked by roughly 20% during Easter.
Imports of electronics and vehicles gained value as the guaraní weakened. Residential rents edged up 0.1%, while petroleum prices declined modestly.
Core inflation rose 0.5% in April, outpacing headline inflation. On an annual basis, core inflation reached 3.9%, up from 3.6% a month earlier. This rate also exceeded April 2024’s 3.1% mark.
The central bank raised its 2025 inflation forecast to 3.8%, citing temporary supply shocks. Officials kept the policy rate at 6.0%, aiming to balance price stability and growth. The board monitors inflation trends and exchange rate movements to guide future decisions.
Economists expect fresh food price pressures to ease in coming months. They anticipate overall inflation to approach 3.5% by year-end, within the target range.
Paraguay operates an implicit inflation target of 3.5%, with a tolerance range of plus or minus 1.5 points. This framework guides monetary policy and anchors price expectations. Over the past decade, inflation averaged about 5.2%, reflecting volatile food and energy costs.
Hydroelectric earnings in dollars underpin public revenues and support the currency. Strong export receipts from Itaipu and Yacyretá plants help offset import cost pressures. However, global commodity swings still influence local prices for fuel and grains.
The guaraní experienced moderate depreciation this quarter, amplifying import price inflation. Central bankers stress that stable exchange rates remain crucial for business planning.
The inflation slowdown provides breathing room for domestic producers and consumers. Nonetheless, rising core inflation warns of persistent underlying price pressures.
Key Facts
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— For the complete picture, read our in-depth guide: Paraguay: Washington's Most Valued Ally in Latin America
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief