{
  "title": "Paraguay: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Paraguay",
  "publication": "IMF Staff Country Reports, April 30, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/04/30/paraguay-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-46837",
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  "summary": "This 2019 Article IV Consultation on Paraguay focused on the policies needed to promote long-term growth, widen the tax base, improve public spending efficiency, and strengthen financial sector supervision.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- The consultation focused on policies to promote long-term growth, widen the tax base, improve public spending efficiency, and strengthen financial sector supervision.\n- Poverty declined from 58 percent in 2002 to 26 percent currently.\n- Continued convergence is expected to help reduce poverty further and generate revenues to finance large spending needs.\n- The banking sector is well-capitalized and stable.\n- Casas de credito and casas comerciales require better understanding and supervision.\n- The pension system needs reform to:\n  - prevent large pension deficits in the future, and\n  - boost the development of the domestic capital market for long-term instruments.\n- Authorities concurred with IMF staff’s assessment of the main bottlenecks to long-term economic growth and agreed that structural reforms would help attract more foreign investments and increase the dynamism of the domestic private sector."
    },
    {
      "heading": "Macroeconomic and sectoral issues highlighted",
      "content": "- Fiscal and revenue-side challenges: emphasis on widening the tax base and improving public spending efficiency to finance large spending needs.\n- Financial sector supervision: while banks are well-capitalized and stable, nonbank lenders (casas de credito and casas comerciales) need enhanced oversight.\n- Pension system vulnerabilities: reforms needed to avoid future large deficits and to support long-term domestic capital market development.\n- Poverty and convergence: significant past progress (58 percent in 2002 to 26 percent currently) with expectations of further poverty reduction through continued convergence."
    },
    {
      "heading": "Policy recommendations and authorities' stance",
      "content": "- Implement structural reforms to:\n  - attract more foreign investment, and\n  - increase the dynamism of the domestic private sector.\n- Strengthen financial sector supervision, with specific attention to casas de credito and casas comerciales.\n- Reform the pension system to secure fiscal sustainability and foster long-term financial market development.\n- Widen the tax base and improve public spending efficiency to generate revenues for large spending needs.\n- The authorities agreed with IMF staff’s diagnosis and supported structural reform priorities.\n\nSource: Paraguay: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Paraguay (April 30, 2019).\n\n---\n\n Content in this bundle\n\n- Paraguay\n  - Paraguay (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Paraguay (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: April 30, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781498312240.002",
    "The consultation focused on policies to promote long-term growth, widen the tax base, improve public spending efficiency, and strengthen financial sector supervision.",
    "Poverty declined from 58 percent in 2002 to 26 percent currently.",
    "Continued convergence is expected to help reduce poverty further and generate revenues to finance large spending needs.",
    "The banking sector is well-capitalized and stable.",
    "Casas de credito and casas comerciales require better understanding and supervision.",
    "The pension system needs reform to:",
    "Authorities concurred with IMF staff’s assessment of the main bottlenecks to long-term economic growth and agreed that structural reforms would help attract more foreign investments and increase the dynamism of the domestic private sector.",
    "Fiscal and revenue-side challenges: emphasis on widening the tax base and improving public spending efficiency to finance large spending needs.",
    "Financial sector supervision: while banks are well-capitalized and stable, nonbank lenders (casas de credito and casas comerciales) need enhanced oversight.",
    "Pension system vulnerabilities: reforms needed to avoid future large deficits and to support long-term domestic capital market development.",
    "Poverty and convergence: significant past progress (58 percent in 2002 to 26 percent currently) with expectations of further poverty reduction through continued convergence.",
    "Implement structural reforms to:",
    "Strengthen financial sector supervision, with specific attention to casas de credito and casas comerciales.",
    "Reform the pension system to secure fiscal sustainability and foster long-term financial market development.",
    "Widen the tax base and improve public spending efficiency to generate revenues for large spending needs.",
    "The authorities agreed with IMF staff’s diagnosis and supported structural reform priorities.",
    "**Paraguay**"
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