According to Fitch Ratings, one of the most authoritative Risk Qualification agencies, Paraguay changed its position passing from a stable position to a very positive position and reaffirmed its investment degree, that is to say the investments made by this little and dynamic countries.
If we look at Risk Qualification explained by Fitch Ratings, we note Paraguay’s excellent qualification. As a matter of fact, Paraguay switches from BBB to BBB+, thus confirming its percentage of investments and switching from a negative position to a stable position and then from a stable position to a positive position.
Fitch Ratings highlights that Paraguay’s transition from a positive position to a + positive position outlines a continual improvement, regarding its fiscal situation and especially an economic recover, beyond the best expectations. This improvement is even more significant, because was reached in a very hard and tiring period because of Covid 19 pandemic, that worldwide has made a great economic impact.
A note from the Ministry of Economy and Finance illustrates that nicely.
If we also consider the closures occurred in 2021, Fitch Ratings foresees an actual increase of 15% for GDP (Gross Domestic Product), which is even an increase of the initial estimate, that stood at 12%. In addition, in 2022 a net increase of 7% is expected.
Currently, Fitch Ratings expects that in 2022 Paraguay can reach and be at the PIL level it had before the Covid 19 pandemic and one year earlier than expected.
On the other hand foresees in its note that the debt to GDP ratio will gradually reduce in the coming months due to the path taken regarding fiscal consolidation.
In addition, Fitch Ratings foresaw that at the end of 2021 the amount of Central Government debt was 64,2% of GDP, while in the year was 68,5%.
The Central Government debt will be 57,7% of GDP, that is below the average of BBB category, that precisely is 60,3%.
What to say at this point? We can only say these number are not fantasies, they speak for themselves and show how Paraguay achieved and is achieving a strong economic recovery.
