The Central Bank of Paraguay (BCP) predicts a 3.8% growth in the country’s Gross Domestic Product (GDP) for 2024.
Carlos Carvallo, the bank’s president, made this announcement today. He explained that this forecast is based on the growth of various economic sectors.
This reflects a trend towards diversification developed in recent years.
Furthermore, Carvallo announced that inflation is expected to meet the BCP’s target, rising to 4% by the end of 2024.
The primary sector, which includes agriculture, is projected to grow by 4.2%, thanks to expected improvements in weather conditions benefiting crop production.
Carvallo also anticipates positive developments in livestock farming, aligning with the sector’s optimistic expectations.
For 2024, he predicts a recovery in construction, manufacturing, trade, energy generation, and services.
He highlighted Paraguay’s stability, noting its resilience during the COVID-19 pandemic.
While other countries’ economies shrank by 4% to 10% in 2020, Paraguay’s GDP fell just 0.8%.
Despite significant pandemic challenges, this strength was partly due to increased diversification.
Regarding next year’s inflation, Carvallo emphasized the importance of maintaining price stability as the central focus of monetary policy.
José Uribe, Executive President of the Latin American Reserve Fund, commented that global growth in 2024 might mirror that of 2023.
He expects a more favorable external environment with significantly lower inflation and reduced geopolitical tensions.
Background
In comparison, Paraguay’s projected growth surpasses regional averages.
Many Latin American countries face slower recoveries post-pandemic, making Paraguay’s forecast notable.
This growth is not just a rebound from pandemic lows but a sign of underlying economic health.
Paraguay’s focus on diversifying its economy has paid off, setting it apart from neighbors relying heavily on a few sectors.
Diversification reduces vulnerability to global market fluctuations, a key strength for small economies.
Paraguay’s management of inflation is also commendable. Keeping it close to the 4% target contrasts with higher inflation rates in other regional economies.
This financial stability attracts foreign investment, crucial for sustained growth and development.