Paraguay: Selected Issues

International Monetary Fund

No 2016/117, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper focuses on the reform options for Paraguay’s fiscal responsibilities law as well as credit growth and banking system vulnerabilities. During the first year of Paraguay’s fiscal responsibility law, implementation has proven challenging, and a debate has emerged over whether its current design is excessively rigid. There are also important reputational costs to amending the framework. Paraguay has experienced rapid credit growth over the past decade. Reflecting these considerations, this chapter analyzes banks’ health and potential risks in Paraguay. Paraguay’s credit markets, as well as the rest of its financial system, are dominated by commercial banks.

Keywords: ISCR; CR; Paraguay; deficit; bank; deficit ceiling; credit growth; banking system assets; deficit rule; expenditure rule; asset quality; parent bank; PFM legal and regulatory frameworks; Fiscal rules; Capital spending; Current spending (search for similar items in EconPapers)
Pages: 52
Date: 2016-05-11
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