Paraguay 

Paraguay country policy

Policy established 25 November 2010

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 100 mln euro
• - of which was used as at 2012-02-29 0 mln euro

Country class: 5

Paraguay country facts

Atradius Dutch State Business  Economic Research
Country Report last updated :  21 September 2011
Country :  PARAGUAY  

Political Situation
Rather Fragile Democracy

Head of state
President Fernando Lugo.

Form of government
Government of the Alianza Patriotica para el Cambio (APC).

Internal Economic Situation
Strong Recovery From 2009-Recession

General situation
Economic performance relies heavily on agriculture, hydro power and informal (foreign) trade. After a recession in 2009 when the global financial crisis and severe drought severely hit the economy, strong recovery thanks to rebound of exports on the basis of another bumper soya harvest and the upswing in Brazil: 2010 +14.5%, 2011 +6%. Inflation (9.4% 2011Q2 is well above target (5%; +/-2%). Efforts to clampdown on illegal trade have been successful but still large informal activities understate the size of the economy. 
 
External Economic Situation   :   Reasonable 

Main sources of foreign exchange
Agricultural products: soybeans, cotton, meat; hydro energy.

Main foreign markets
Uruguay (16%), Argentina (16%), Brazil (14%), EU (6%).

Main expenses of foreign exchange
Capital goods (40%), intermediate goods (27%).

 
Balance of payments 
In 2010/’11 imports have increased even faster than the export revenues, resulting in higher current account deficits despite additional proceeds from Itaipu. After a weak 2009 the guarani exchange rate has stabilised, even appreciated vs US$ by 15% in 2010/’11.