MercoPress. South Atlantic News Agency

Paraguay's BCP meets inflation target for 2023

For next year, the BCP also foresees inflation around 4%, Mora pointed out

Paraguay's Central Bank (BCP) confirmed Thursday in Asunción that after 2 years of overshooting the target, inflation in 2023 resulted according to plan. After the Consumer Price Index (CPI) exceeded 6% in 2021 and 2022, it ended at 3.7% in 2023. The BCP had set a 4% cap for the current exercise and could thus herald hopeful expectations for the year ahead.

BCP Chief Economist Miguel Mora explained that the year-end inflation figure demonstrates the effectiveness of the policies adopted to stabilize price variations, together with a more favorable scenario in terms of variables such as the price of raw materials. ”We had made a year-end projection at the beginning of 2023, which was 4.5%, but the result we are seeing (3.7%) occurs mainly due to certain surprises, mainly on the side of commodity prices that adjusted downwards in a greater proportion than we had initially anticipated,” he said.

Specifically, inflation in December was 0.3%, higher than the -0.2% rate recorded in the same month of the previous year, according to the BCP. The behavior of inflation during the month was mainly due to price increases in food goods and services, which had the greatest impact on the monthly result. However, these increases were compensated by reductions in fuel prices.

In food, price increases were mainly in the volatile items of the food basket (fruits and vegetables) and beef. There were also price increases in beef substitutes, such as pork, poultry, fish, sausages, and offal, while dairy products, mainly cheese and eggs, also rose.

On the other hand, prices also went up in home equipment repairs, vehicle maintenance, cabs, intercity buses, urban transport, international buses, airplane tickets, and cable TV, among other items.

Regarding the accumulated variations for the year, pasta went up 14.5%, sugar and sweeteners 26.1%, and vegetables and tubers 29%.

For next year, the BCP foresees inflation around 4%, Mora also pointed out.