Asunción, IP Agency.- The Chief of Mission of the International Monetary Fund (IMF), Mauricio Villafuerte, highlighted the macroeconomic performance of Paraguay, and stated that this generates an expectation of economic growth of 4.5% by the end of 2023.
Villafuerte’s statements were given this Tuesday at a press conference at the headquarters of the Central Bank of Paraguay (BCP) at the end of the closing meeting with authorities from the Ministry of Finance and the BCP.
The head of the mission of the multilateral organization also indicated that the IMF expects Paraguay to end the year with a fiscal deficit of 2.3 percent. In this sense, he urged the Paraguayan authorities to continue the work of reducing the deficit in order to comply with the Fiscal Responsibility Law.
“Paraguay needs to rebuild fiscal buffers and preserve resilience to future shocks. “We encourage the authorities to keep their eyes focused on reducing the deficit in 2024 to comply with the Fiscal Responsibility Law, which establishes a limit of 1.5 percent of GDP,” he said.
On the other hand, he highlighted the notable decline in inflation and asserted that the cautious position of the moderately restrictive monetary policy applied by the BCP is appropriate and could be relaxed once the inflation standards estimated for this year are reached.
“In the last 6 months, the successful implementation of inflation targets established by the authorities allowed the exchange rate to act as an important buffer,” he said.
Regarding the implementation of the Policy Coordination Instrument (PCI), he said that Paraguay presents positive progress, and that the quantitative goals for December 2022 were met in general terms.
Likewise, the commitments of the structural reform agenda, including the presentation before the National Congress of the bill of the public function, that of the civil service, that of real estate guarantees; in addition to the coverage of social programs such as Tekoporã and Alimentary Pension for Older Adults.
The Paraguayan Government is committed to advancing the PCI reform objectives established for 2023, this includes the preparation of a transition law for the Fiscal Fund and a new version of the law for the supervision of the pension system, which would represent a more comprehensive basis for the pension system.
The mission’s discussions with authorities on economic prospects and the future reform agenda were cordial and constructive, Villafuerte said.
Finally, he thanked the Minister of Finance, Oscar Llamosas; the president of the BCP, José Cantero, and the other authorities with whom they were working during this time.