The International Monetary Fund (IMF) has approved a support program for Paraguay, requested by the government to implement reforms, the financial institution reported this Tuesday (22).
In October, the Paraguayan government reached an agreement with the IMF technical team on a set of macroeconomic policies and structural reforms to achieve a two-year program under the Policy Coordination Instrument (PCI). The executive board gave the go-ahead.
The country continues to recover from the pandemic in a context of rising inflation, but “the prospect of a recovery in 2023 is favorable, and the authorities are implementing policies to follow a stronger, more resilient and inclusive development path”, said the IMF in a statement.
“The Paraguayan authorities have implemented appropriate fiscal, social and financial support measures to mitigate the negative impact of the pandemic and sustain the recovery in 2020 and 2021”, but “this year the economy faces simultaneous shocks, including a severe drought” and high world inflation, explained Kenji Okamura, Deputy Director General of the IMF, cited in the note.
In this context, the economic program, which will be revised every six months, “will focus on policies to guarantee macroeconomic stability, foster economic growth and improve social protection”, he said, insisting on the importance of returning to the 1.5% fiscal deficit ceiling. of GDP in 2024.
Among the main measures are mobilizing more domestic revenues, reforming the public pension fund, increasing the efficiency of the public sector and, in terms of monetary policy, lowering inflation to 4%. In addition, the government plans to fight corruption.
“The authorities’ reform agenda’s emphasis on improving social protection and reducing poverty and inequality is welcome. More measures will be needed to improve the impact of social assistance programs, increase their coverage among the vulnerable population, promote the formalization of the economy and strengthen financial inclusion,” said Okamura.
#IMF #approves #economic #support #program #Paraguay #ISTOÉ #DINHEIRO