Paraguay

Following six years of positive growth, Paraguay’s GDP fell by 3.8% in 2009, which was equivalent to a 5.5% drop in per capita GDP. Despite having implemented an expansionary fiscal policy to mitigate the negative effects of the international crisis, the government achieved a small public accounts surplus of about 0.1% of GDP. A fiscal stimulus of some 3.9% of GDP provided through public spending compensated in part for the downturn in private consumption. The intense drought that hit the country in 2009 caused a sharp 25% decline in the activity of the agricultural sector, which is the largest sector of the Paraguayan economy. Inflation came down from 7.5% in 2008 to 1.9% in 2009. A similar drop was seen in most of the region’s countries and may be attributed to falling international commodity prices associated with the global economic slowdown. The nominal exchange rate against the dollar rose by 14.4% because of the dollar’s appreciation and the slack performance of Paraguay’s external sector. The current account deficit narrowed to US$ 196 million (1.4% of GDP). In 2010, the economy is projected to expand on the back of higher external and domestic demand and a more buoyant agricultural sector. ECLAC forecasts GDP growth of around 7%.

Sustainable Development Goals:

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions