Statement by an IMF Staff Mission to ParaguayPress Release No. 07/178
August 8, 2007
Mr. Alejandro Santos, mission chief of the International Monetary Fund (IMF) to Paraguay, issued the following statement today in Asunción:
"A mission from the International Monetary Fund (IMF) visited Asunción during the last two weeks for discussions in the context of the fourth review under the Stand-By Arrangement (SBA), approved by the IMF Executive Board in May 2006. The mission met with Finance Minister César Barreto, Central Bank President German Rojas, other members of the Cabinet of Ministers, and senior government officials.
"The economic expansion continues and real GDP growth is expected to accelerate from 4.3 percent in 2006 to 5 percent in 2007, supported by a strong agricultural recovery. Headline inflation has fallen as the supply shocks of late 2006 unwound, and core inflation continues to be below the 5 percent target for end-2007. The fiscal position remains strong with good revenue performance and continued strict control over expenditures. The balance of payments has been stronger than expected and reserves rose to over US$2 billion at end-June 2007, while the exchange rate has stabilized.
"The authorities' program is broadly on track. All quantitative performance criteria for end-June 2007 under the IMF-supported program were observed with substantial margins. Implementation of the structural agenda is also generally on track with only one structural benchmark still to be completed (the design of a strategy to strengthen the financial position of the Central Bank). The staff will remain in contact with the authorities on this pending issue and expects to complete the discussions for this review shortly.
"The mission would like to thank the authorities and the citizens of Paraguay for their assistance and warm hospitality."