Itaú BBA - Macro Scenario – Paraguay: Activity and inflation on the rise

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Macro Scenario – Paraguay: Activity and inflation on the rise

December 15, 2020

The economy continued to recover in the beginning of 4Q20.

For the version with all charts and tables, please open the attached pdf file

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Economic activity continued to recover sequentially in October after the rebound in 3Q20. We revise our GDP growth forecast for this year up again, to -1.0%, with an upward bias (minor drop) from -1.5% previously. For 2021, we maintain our growth estimate of 4%.

• Inflation accelerated in 4Q20, in line with the recovery in activity and the increase in the price of meat. We have adjusted our inflation forecast upward, to 2.1% for 2020 from 1.8% previously. For 2021, we expect inflation of 3.0%.
• The recovery of activity and tax collection, amid greater control of expenses, led us to correct our fiscal deficit forecast to 6.0% of GDP from 6.3% previously. For 2021, we estimate a fiscal consolidation to a deficit of 4% of GDP.

Juan Carlos Barboza
Diego Ciongo


For the version with all charts and tables, please open the attached pdf file



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