MercoPress. South Atlantic News Agency

Paraguay's growth projected at 3.8% for 2024

“Conditions have improved in 2023 and the outlook for 2024 is favorable,” Carvallo stressed

Paraguay's economy is expected to grow 3.8% in 2024, according to a report from the South American country's Central Bank (BCP) released Tuesday in Asunción. The document also pointed out it would be the highest economic growth in the region next year.

The announcement was made during the “Evaluation 2023 and Prospects 2024: Recovering solid foundations for sustainable growth” conference hosted jointly by the BCP and the Economy Ministry (MEF).

BCP President Carlos Carvallo said a gross domestic product (GDP) growth was forecast for next year at 3.8%, one of the fastest growing in the region after a 4.5% is projected for 2023.

Carvallo foresaw a favorable dynamic in the primary, secondary, and tertiary sectors of the economy, with a strong recovery on the radar for livestock. He also spoke of significant soybean production despite the El Niño phenomenon.

As for the tertiary sector, which includes all economic activities that provide services, the head of the BCP explained that a “synchronized” performance is expected at the sub-sector level. For the primary sector, the growth projection for 2024 is 4.2%, while for the secondary and tertiary sectors, the estimates are 4% and 3.5%, respectively.

This year's 4.5% GDP growth consists of the primary sector increasing by 15.3%, the secondary sector by 2.9% and the tertiary sector by 3.8%, it was explained.

Carvallo also ratified a 3.8% inflation projection for 2023 and 4% for 2024. “Conditions have improved in 2023 and the outlook for 2024 is favorable,” he stressed.

“During the most severe and global shock seen in modern economic history, the Paraguayan economy only fell by 0.8%, compared to other countries in the region, where the fall was between 4% and 10%. In the drought of 2022, the economy grew by 0.1%. Undoubtedly, this resilience is explained by macroeconomic stability, which has created a balance and a space to face shocks,” Carvallo highlighted.

Meanwhile, Moody's credit rating agency kept Paraguay's grading at Ba1 with a positive outlook thanks to the country's low public debt and its compliance with the Fiscal Responsibility Act.