## Paraguay: Request for Stand-By Arrangement—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Paraguay

_IMF Staff Country Reports, August 14, 2006_

## Source details

**Canonical URL:** [Paraguay: Request for Stand-By Arrangement—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Paraguay](https://www.imf.org/en/publications/cr/issues/2016/12/31/paraguay-request-for-stand-by-arrangement-staff-report-press-release-on-the-executive-board-19819)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/paraguay-request-for-stand-by-arrangement-staff-report-press-release-on-the-executive-board-19819/index.md)
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## Bibliographic details
- Published: August 14, 2006
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451832518.002

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### Executive summary
- The authorities’ program for 2003–05, supported by the previous Stand-By Arrangement (SBA), successfully stabilized the economy despite difficult conditions.
- A new economic program for 2006–08 is needed to:
  - consolidate macroeconomic stability,
  - address remaining vulnerabilities, and
  - create the conditions for higher growth.
- In the context of a benign environment, inflation fell significantly to 2¾ percent in 2004—the lowest inflation rate since the early 1970s.
- The return of capital flight in 2004 satisfied increases in the demand for money and generated a rapid growth of monetary aggregates.

### Macroeconomic stabilization and vulnerabilities
- 2003–05 program outcomes:
  - Stabilization achieved under the previous SBA.
  - Difficult external and/or domestic conditions are noted as context for stabilization.
- Rationale for a new program (2006–08):
  - Consolidation of achieved macroeconomic stability.
  - Need to address remaining vulnerabilities that the prior program did not fully eliminate.
  - Objective to create conditions for higher growth.

### Inflation, money demand, and monetary aggregates
- Inflation:
  - Fell to 2¾ percent in 2004.
  - This rate is identified as the lowest since the early 1970s.
- Money and capital flows:
  - The return of capital flight in 2004 satisfied increases in the demand for money.
  - This process generated a rapid growth of monetary aggregates.

### Thematic coverage (as listed)
- Subjects: Banking, Currencies, Economic sectors, External debt, Inflation, Money, Prices, Public debt, Public sector
- Keywords: authority, Caribbean, CR, Currencies, government arrears, government of Paraguay, government reform agenda, Inflation, ISCR, monetary authorities, monetary policy, prudent fiscal policy, Public sector, reform agenda, SDR, supportive monetary policy

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## Content in this bundle

- **_cr06302 - Executive Summary**
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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/paraguay-request-for-stand-by-arrangement-staff-report-press-release-on-the-executive-board-19819_