The national/local economy grew by only 0.1% in 2022

Negative factors, both internal and external, for the previous year had great impacts on the local economy, causing almost zero growth in the GDP. According to the latest reports, the official growth in 2022 was only 0.1%, even lower than the expected 0.2% for that period.

The Central Bank of Paraguay (BCP) announced the development of the economy in its quarterly accounts report, compared to the last period of the previous year, and indicated that a growth of 1.7% was observed, less than 2.9% in the third quarter. Through the four data from the previous year, it can be seen that the cumulative growth of GDP during 2022 amounted to only 0.1%. This result represented an even lower value than had been expected by parent banks and other institutions in the country, as growth of 0.2% was estimated by the end of the year. With this data, Paraguay was shown to be the country with the lowest level of growth in the region.

From the production approach and according to the latest data from the Ministry of Agriculture and Livestock (MAG), agriculture recorded a two-year growth of 48.2% and accumulated a contraction of 12.7% in the fourth quarter of the previous year. The annual result was explained by the positive performance of soybeans, maize, wheat and cotton, while a decline was observed in rice, sugarcane, cassava and other tubers.

Similarly, according to the parent bank report, there have been improvements in livestock, with a higher level of slaughter; While the manufacturing activity recorded a decline of 4.3% due to the decrease in the production of oils, mills and bakeries. Meanwhile, positive differences in the meat, dairy, sugar, beverage, tobacco and paper products industries helped mitigate the decline in this sector.

From the perspective of spending, a decline in domestic demand was observed in the fourth quarter of 2022. In its components, it can be seen that the annual reduction in gross capital formation prevails; However, they pointed to an increase in internal consumption in the margin.

The report details that external demand was the most important component of the GDP increase in the fourth quarter of 2022. In that period, both goods and services exports recorded a positive performance for the country’s economy.