MercoPress. South Atlantic News Agency

IMF says Paraguay has good macroeconomic performance

Villafuerte visited Asunción with an IMF team from March 27 to April 4

A statement from the International Monetary Fund (IMF) released in Asunción on Wednesday highlighted Paraguay's macroeconomic performance and underlined that the South American country met the goals set for the end of 2022, after implementing a two-year technical support program from the global agency.

Paraguay complied in “general terms” with the quantitative goals stipulated for December 2022 in its economy, after the implementation of the Policy Coordination Instrument (PCI), a two-year program of technical support from the world organization, the IMF said in a statement.

IMF Mission Chief in Paraguay, Mauricio Villafuerte, highlighted Paraguay's macroeconomic performance which generates an economic growth expectation of 4.5% by the end of 2023.

“We encourage the authorities to keep their eyes focused on reducing the deficit in 2024 to comply with the Fiscal Responsibility Law that establishes a limit for the fiscal deficit of 1.5 percent of GDP,” Villafuerte said.

“The implementation of the PCI in Paraguay has been progressing well” and “remains on the expected trajectory,” he added while noting that the Paraguayan government has pledged to advance in the PCI reform objectives set for 2023, including the elaboration of a transition law for the Fiscal Fund and a new version of the law for the supervision of the pension system, which would represent a more comprehensive basis for the pension system.

Villafuerte visited Asunción with an IMF team from March 27 to April 4 to conduct discussions on the first review under the PCI instrument with Paraguay.

The IMF team held meetings with the Central Bank (BCP) President José Cantero, Finance Minister Óscar Llamosas, and representatives of the multilateral financial institutions.

On November 22, the IMF's Executive Board approved this two-year technical support program (PCI) for Paraguay, in exchange for a series of macroeconomic and structural reforms. The PCI is a mechanism to help countries formulate and implement macroeconomic policy programs that can help them unlock financing from official creditors or private investors.

The reforms to be carried out in Paraguay are based on three pillars: ensuring macroeconomic stability and resilience; increasing productivity and encouraging economic growth; and increasing social protection and inclusiveness, it was explained.