Paraguay: Second Review Under the Policy Coordination Instrument, Request for an Extension of the Policy Coordination Instrument, Modification of Targets, Inflation Band Consultation, and Request of Arrangement under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Paraguay

IMF Staff Country Reports, January 4, 2024

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Canonical URL: Paraguay: Second Review Under the Policy Coordination Instrument, Request for an Extension of the Policy Coordination Instrument, Modification of Targets, Inflation Band Consultation, and Request of Arrangement under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Paraguay

Presents Paraguay’s Second Review under the Policy Coordination Instrument, Request for an Extension of the Policy Coordination Instrument, Modification of Targets, Inflation Band Consultation, and Request of Arrangement under the Resilience and Sustainability Facility (RSF).
The government is committed to continued prudent macroeconomic policies and the implementation of structural reforms, including a series of adaptation and mitigation measures and to preserve and expand its green energy matrix.
Barring global and weather-related external shocks, Paraguay’s growth prospects are bright.
It remains important for Paraguay to rebuild fiscal buffers, including through implementation of long-standing structural reforms.
The re-establishment of the fiscal deficit rule by 2026 is rightfully the government’s key priority.

The authorities are committed to implementing an ambitious set of climate-related reforms consistent with maximum access under the RSF.
The commitment to implement an ambitious matrix of climate-related reforms, closely coordinated with development partners, will help enhance the country’s image as a ‘green’ investment destination.
Structural reforms include a series of adaptation and mitigation measures and actions to preserve and expand the green energy matrix.

Rebuild fiscal buffers through implementation of long-standing structural reforms.
Re-establish the fiscal deficit rule by 2026 as a key government priority.
Maintain prudent macroeconomic policies to support growth prospects and resilience to external shocks.

Subject: Climate change, Commodities, Electricity, Environment, International organization, Monetary policy, Public debt
Keywords: BCP credit survey, Climate change, Electricity, Global, inflation expectation, inflation-targeting regime, RSF request, sound capacity, South America