Paraguay: 2026 Article IV Consultation-Press Release; and Staff Report

International Monetary Fund

No 2026/235, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2026 Article IV Consultation discusses that Paraguay’s economy continues to show remarkable resilience, supported by strong macroeconomic fundamentals and reform efforts. Sustained structural reform implementation will be key to lifting productivity and ensuring durable and inclusive growth over the medium term. Fiscal policy should remain anchored on restoring compliance with the Fiscal Responsibility Law while protecting essential spending, and strengthening public financial management and settling expenditure arrears to preserve fiscal policy credibility. The current monetary policy settings are appropriate in the near term and there would be scope for gradual further easing of the monetary policy stance if the energy shock proves temporary, inflation expectations remain anchored, and economic activity moderates as projected. Sustaining structural reform implementation is key to durable and inclusive growth. Additional reductions in informality and further strengthening governance and anti-corruption institutions are critical to unlock productivity gains and support investment. Climate-related reforms initiated under the Resilience and Sustainability Facility should continue to strengthen Paraguay’s resilience to natural disasters.

Pages: 66
Date: 2026-09-01
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