A recent economic review, issued by the German-Paraguayan Chamber of Industry Commerce, reveals some important facts regarding the evolution of the Paraguayan economy throughout the year 2014 and the future perspectives for the year 2015.
In this sense, the report explains that the year 2014 closed with an inflation rate of 4,2%, which is considered a favorable result, however, the Paraguayan Central Bank foresees and inflation rate of 4,5% for the year 2015. It also explains that the 2014 Government Budget closed with a 2,4% deficit, the highest in one decade, as a result of the high public investment, according to the Ministry of Finance vice-ministers.
Moreover, a growth of 4,5% is expected for the year 2015, the principal promoters being the industrial, construction and service sectors, while the agricultural sectors loses its major role, due to the fall of commodity prices at international markets.
Tax collection has suffered a considerable increase which reached USD 2,2 billion, 24% more than what was collected in the year 2013.
With respect to the Political Economy, the report mentions the recent appointment of Santiago Peña as Minister of Finance, a recognized young economics ex Officer of IMF and former Director of the Central Bank of Paraguay. The reports refers to the approval of the 2015 Government Budget which has a deficit of 3,4%, whereas the Law on Fiscal Responsibility allows only a deficit of 1,5%.
Foreign trade was not very favorable for Paraguay compared to the year 2013, as only a 2,4% growth for exports was registered which sums up to USD 9,7 billion. The main factor which undermined growth was the decrease in the export of soybean (the most significant item among the export products), which fell by 8%. Hence, it is expected that meat will turn into the next flagship product for Paraguay, as a result of the 20% increase in its export throughout the year 2014, in comparison to the year 2013.
Other important facts include the major increase of tourists visiting the country, the establishment of a new steel factory and a new textile industry, as well as the much-expected Metrobus to improve public transportation system in the City of Asuncion.
A copy of the article (in Spanish and in German) can be found here.
*Published by AHK Paraguay – German-Paraguayan Chamber of Industry and Commerce. www.ahkparaguay.com