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Article: Paraguay
- Article from:
- Oxford Economic Country Briefings
- Article date:
- August 5, 2009
- Author:
CopyrightCopyright Oxford Economic Forecasting Aug 5, 2009. Provided by ProQuest LLC. (Hide copyright information)
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Highlights and Key Issues
* Falling demand from Brazil and as well as a severe drought, has choked off the past two years' export-led growth, which is now unlikely to resume before 201 1 . Poverty barriers to expenditure reduction mean that the sudden end to GDP growth, which averaged nearly 5% in 2003-08 as primary commodity exports boomed, will force a slide back into fiscal deficit.
* Fiscal loosening could be inflationary unless monetary policy stays tight, despite inflation coming within the 5% central rate. Budget strains have restored momentum to state enterprise reform, with oil firm Petropar and cement group INC to be restructured and possibly privatised. President Lugo has ...