MercoPress. South Atlantic News Agency

Paraguay economy contracts 0.3% in third quarter confirming strong recession

With an end to the drought 2010 is more promising

Paraguay’s GDP in the third quarter contracted 0.3% compared a year ago confirming the country’s recession, according to the latest report from the Central Bank. However the performance was an improvement compared to the drop of previous quarters, which “could be anticipating the recovery of the economy for the coming year”.

Paraguay with the smallest and weakest economy of the four full members of Mercosur has suffered the full impact of world recession, the fall in international commodities’ prices and a prolonged drought which affected the heartland of South America.

In the first nine months of 2009 the Paraguayan economy contracted 3.6%, even when during the third quarter there was a 2% advance over the previous quarter.

The Central Bank estimates that the Paraguayan economy will contract anywhere between38 and 4% this year, the worst performance in at least a decade.

Growth estimates for next year from the Central Bank, IMF and the Inter American Development bank range in a floor of 3%.