Report dated 4 February 2014 Paraguay has upgraded its bond rating from Ba3 to Ba2 and changed its investment climate from s decisions were driven by the following reasons:
(1) Improved fiscal position of the main indicators in respect to the peer median rating for category countries.
(2) The strengthening of institutional framework as a result of the recently approved legislative package. The government of President Horacio Cartes, who took office in August 2013, won approval of several important bills a few months after having come to power. These bills include: a tax reform, the Fiscal Responsibility Law, the enactment of provisions concerning the modernization of the State Financial Administration, the Public Private Partnership Law (PPP) and the enactment of provisions for better framing the issuance of Country Sovereign Bonds.
(3) The smooth political transition in which the country was tangled during 2013 without significantly impacting the national economy and also the high level of technical comportment by the Ministry of Finance and the Central Bank during said transition. The restatement of Paraguay to the Mercosur, the South American Trade Agreement, also enhanced the upgrading factors for the new country risk rating. Paraguay’s new Administration plans to invest about U.S. $16,480 million during the next five years to boost infrastructure sectors, water and sanitation, electricity, health, education, housing, assistance to producers and telecommunications.
Paraguay’s new Administration plans to invest about U.S. $16,480 million during the next five years to boost infrastructure sectors, water and sanitation, electricity, health, education, housing, assistance to producers and telecommunications. Paraguay’s Central Bank has reported a GDP growth of 13.6 per cent in 2013, being the highest in Latin America and making Paraguay one of the leading growth countries in the World, with a 4 per cent inflation rate and a growth expectation for the current year of 4.8 per cent. Paraguay is the world’s largest generator and exporter of hydroelectricity with two of the largest hydroelectric dams in Latin America: Itaipu between Brazil-Paraguay and Yacyreta between Argentina-Paraguay, both generating more than 106 million megawatts hour (MW/h) per year.
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