Itaú BBA - Macro Scenario - Paraguay: Lower inflation expectations

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Macro Scenario - Paraguay: Lower inflation expectations

September 13, 2018

We revised our YE18 inflation forecast downward due to the expected deflationary impact of the border trade.

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

The PYG weakened less than other currencies in the region due to BCP intervention, amid the volatility affecting emerging markets. We adjusted our YE18 exchange rate forecast to 5,950 PYG/USD (from 5,800 previously).

Inflation stands at 3.9%, below the center of the target range set by the BCP (4% ± 2%). We revised our YE18 inflation forecast downward, to 3.7% from 4%, due to the expected deflationary impact of the border trade.

Activity (5.9% yoy in 2Q18) moderated at the margin in a more volatile external environment, and it supports our GDP growth forecast of 4% for YE18. Our GDP growth forecast for 2019 also stands at 4%, supported by a slightly more benign international scenario. 
 

Juan Carlos Barboza
Diego Ciongo

 

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



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