Economy & Business - November 2022


PARAGUAY| | Staff-level agreement with IMF. On 13 October Paraguay’s finance ministry announced that it had reached a staff-level agreement with the International Monetary Fund (IMF) on a set of macroeconomic policies and structural reforms, which will form the basis for a two-year agreement under the IMF’s non-financial Policy Coordination Instrument (PCI). If confirmed by the IMF’s executive board, the PCI will be based around three main pillars: ensuring macroeconomic stability and resilience; enhancing productivity and growth; and improving social protection and inclusiveness. The IMF team led by Mauricio Villafuerte outlined in a press statement that Paraguay was continuing to recover from the coronavirus (Covid-19) pandemic and was “facing simultaneous external shocks, including a severe drought that contracted agricultural production this year and a spike in global inflation exacerbated by the impact of the war in Ukraine”. The statement notes that “the fiscal, monetary, and financial sector measures implemented in response to those shocks were appropriate to support the economy, though they have led to reduced fiscal buffers as reflected in higher public debt.”

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