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LatinNews Daily - 22 November 2019

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In brief: Congress lifts fiscal deficit cap in Paraguay

* Paraguay’s chamber of deputies has given final approval to a bill that lifts to 3% for this year the current cap of 1.5% of GDP on the fiscal deficit set in the 2013 fiscal responsibility law (LRF). The LRF is considered one of the foundations on which Paraguay’s macroeconomic stability has rested in recent years. But with Paraguay’s economy falling into recession in the second quarter, the government led by President Mario Abdo Benítez proposed amending the LRF. In line with this it tabled a bill proposing to include a so-called ‘escape clause’ in the LRF that would allow for the doubling of the deficit cap in the event of a national emergency, or national or international economic crisis. Despite the misgivings of some legislators this bill has now been approved by both chambers of congress.