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LatinNews Regional Monitor: Brazil & Southern Cone - 20 February 2020

In brief: Paraguay’s finance ministry discusses changes to fiscal laws

* Paraguay’s finance minister Benigno López has discussed with members of the national congress four bills and amendments to existing laws mooted by the finance ministry, notably in relation to the fiscal responsibility law (‘ley de responsabilidad fiscal’, LRF) which sets a limit on the government’s fiscal deficit, at 1.5% of GDP. López reportedly proposed including ‘escape clauses’ within the LRF, making it easier for the government to exceed the 1.5% limit in exceptional situations without prior congressional approval, while keeping the fiscal deficit below 3% of GDP. Last year, Paraguay’s congress agreed to exceptionally lift the fiscal deficit cap to 3% of GDP after it became apparent that the government’s deficit for 2019 would not remain within the 1.5% target. López also spoke of including a cap on public debt, set at 30% of GDP.

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