Statement by an IMF Staff Mission to ParaguayPress Release No. 06/271
December 13, 2006
Mr. Alejandro Santos, chief of an International Monetary Fund (IMF) mission to Paraguay, issued the following statement today in Asuncion:
"A mission from the International Monetary Fund (IMF) visited Asunción during the last two weeks for discussions in the context of the 2006 Article IV Consultation and the second review under the Stand-By Arrangement (SBA), approved by the IMF Executive Board in May 2006. The mission was headed by Mr. Alejandro Santos and met with President Nicanor Duarte-Frutos; Vice-President Luis Alberto Castiglioni; Central Bank President Mónica Pérez dos Santos; Finance Minister Ernst Bergen; other members of the Economic and Social Cabinet; representatives of Congress; the private sector; and civil society.
"Favorable recent developments suggest that the broad macroeconomic objectives of the authorities' program will be achieved for 2006. Preliminary data indicate that quantitative performance criteria established for end-September 2006 under the IMF-supported program were observed and the expectation is that quantitative targets for end-December 2006 will also be observed. Economic growth has been solid and is expected to reach or exceed the program objective of 3½ percent for 2006. However, inflation has been pushed up by supply shocks and is likely to be above the program objective of 7 percent for 2006. On the structural side, while there was progress in several areas, there has been a delay in implementing one structural measure as a result of technical difficulties (i.e., preparing amendments to the banking law to address remaining weaknesses and related regulations).
"Discussions have been productive and key elements of the authorities' economic program for 2007 have been agreed. The mission expects to conduct the final assessment of this second review in Washington in the coming weeks. After the 2007 budget is approved, the authorities and Fund staff will finish specifying the remaining elements of the economic program and the structural agenda for 2007.
"The mission would like to thank the authorities and the citizens of Paraguay for their hospitality."