IMF Executive Board Concludes the Sixth Review Under the Policy Coordination Instrument and Fourth Review Under the Resilience and Sustainability Facility Arrangement with Paraguay
IMF News, January 22, 2026
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- IMF Executive Board Concludes the Sixth Review Under the Policy Coordination Instrument and Fourth Review Under the Resilience and Sustainability Facility Arrangement with Paraguay
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- Published: January 22, 2026
Key outcomes and disbursement
- The Executive Board completed the sixth review under the PCI arrangement and the fourth review under the RSF arrangement.
- The completion of the reviews makes available SDR 85.6 million (about USD 117 million) to the authorities for disbursement under the RSF.
- Staff supports the authorities’ request for the disbursement of SDR 85.6 million, or approximately USD 117 million, based on completion of RM1, RM2, and RM3 in past reviews and RM5 in this review.
Macroeconomic assessment and outlook
- Paraguay’s economy remains resilient despite global uncertainty.
- Real GDP growth is expected to stay robust in 2026 and thereafter, supported by macroeconomic stability and reforms under the PCI and RSF arrangements.
- Inflation is under control and is expected to reach the central bank’s target of 3.5 percent in 2026, justifying a data-driven approach to monetary policy.
- The external current account is expected to weaken short-term due to FDI-related imports but should strengthen over the medium term as new exports come on stream.
- Foreign reserves remain above adequacy thresholds.
- Risks are balanced:
- Downside: weather shocks are a salient downside risk.
- Upside: stronger-than-anticipated FDI is a key potential upside.
Fiscal stance and consolidation
- Completing the fiscal consolidation plan remains essential for maintaining macroeconomic stability.
- The authorities are making steady progress towards reducing the fiscal deficit to 1.5 percent of GDP by 2026 and remain committed to fulfilling this objective.
- Policy areas highlighted to support consolidation and create space for development priorities:
- Strengthen tax collection.
- Enhance government efficiency.
- Address sustainability of the public pension system.
- Improve public financial management to reinforce credibility in fiscal policy implementation.
Structural reforms and institutional priorities
- The reviews mark the successful completion of a comprehensive home-grown reform agenda supported by the PCI and RSF.
- Continued structural reform momentum is critical to underpin macroeconomic stability and foster sustainable, inclusive growth.
- Reform areas advanced and prioritized:
- Strengthening governance and anti-corruption frameworks.
- Developing domestic capital markets.
- Improving the civil service and enhancing government efficiency and oversight.
- Strengthening the National Directorate of Tax Revenues.
- Enhancing supervision and sustainability of private pension funds.
- Facilitating private investment and safeguarding property rights.
- Digitizing the national payment system.
- Bolstering resilience to natural disasters.
- Continued progress and sustaining implementation pace are essential to further improve the investment climate.
Staff assessment and program status
- The PCI remains on track to meet its objectives despite some missed targets, given compensating factors and the authorities’ policy commitments.
- Staff supports completion of the sixth review under the PCI and fourth review under the RSF.
- The Executive Board decision was taken under its lapse-of-time procedure.[1]
Press Release No. 26/014 — January 22, 2026; IMF Communications Department