MercoPress. South Atlantic News Agency

Paraguay’s November inflation index negative helped by a glut of beef

A ban of beef exports because of an FMD outbreak is benefiting consumers

Paraguay experienced negative inflation during the month of November influenced by the fall in meat prices, mainly beef, because of a ban on exports, which more than compensated an increase in fuel costs.

According to the country’s Central Bank inflation was minus 0.1% last month under the impact of lower food prices, specifically beef, diary produce and sugar.

These drops helped to overcome the increase in fuel prices and in imported goods which have suffered from the strong appreciation of the US dollar in the local money market.

The huge stocks of beef originally destined for export but forced to remain in the country following the outbreak of foot and mouth disease and the ban on shipments, is benefiting positively consumers, a tendency which is expected to last for another three months say experts.

On the opposite side the higher price of fuels in November was significant, particularly gas oil which has suffered the double effect “of the increase in the value of the US dollar and a policy of adjusting fuel to its real costs and cutting losses for the government’s monopoly energy company”.

However the Paraguayan central bank points out that the consumer prices index for November incorporates half the gas oil increase since it was announced in the second half of the month while the rest should be reflected in the December index.

Likewise all imported goods or conditioned to the foreign exchange suffered the impact of the weaker local currency Guarani, having to pay more for cars, vans, motorcycles, spares, accessories, furniture, home equipment, etc.

With the November negative index (minus 0.1%), accumulated inflation in the eleven months of 2011 totals 4.1% while in the last twelve months, 5.6%, below the 6.2% from October and the 6.1% of November last year.