The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
Paraguay weathered the global economic crisis well, supported by an appropriate policy response. The strong rebound of economic growth has given rise to overheating pressures. Policies need to adjust further to ensure a soft landing of the economy. The banking system remains sound, but there is a need to guard it against emerging risks. The monetary policy framework should be strengthened further to support the move to an inflation-targeting (IT) regime. Higher tax revenues are needed to address important deficiencies in infrastructure and basic social services.