The “small” economy, mainly agricultural, showed its neighbouring countries that it is able to grow on its own behalf. The Forbes Magazine reports that at a time when a drop in world export prices of the essential products paralysed the neighbouring economic giants, that is Brazil and Argentine, the stable macroeconomic structure of Paraguay and the prudent fiscal policies helped the Country to get through this storm, maintaining a very positive and lasting growth.
In the last decade, the annual GDP growth was on average around 4,8%, powered by agricultural exports, hydroelectric power and a rapidly expanding industry. By minimising the economic instability, the Country has recently reduced the poverty level, the prosperity has increased and it has become a regional leader.
The Forbes Magazine reports that at the forefront, as regards Paraguayan transformation, there is its President Horacio Cartes, who took office in 2013, starting the new era of the economic success of Paraguay. During his five-years term, that ended in 2018, Cartes and his team modernized the economy and they brought Paraguay on the world stage.
The authorised representative promoted the first National Plan for the Country Development for years 2014-2030, centred on poverty reduction, on social and inclusive development and on the inclusion of Paraguay in the world economy. His administration has successfully legislated in favour of a greater transparency of the Government and of a stricter fiscal responsibility in order to tackle corruption and inefficiency of the public sector, with other reforms carried out in the last decade aimed at inflation and at a creation of an Advisory Fiscal Committee.
Paraguay has consolidated the Price and Stability Index of the Exchange Rate and of its Country and the public debt like one of the lowest of the region with a 22% GDP.
The qualification international agencies have constantly improved the sovereign risk of the Country and in 2018 Paraguay should achieve the Investment Grade. Getulio Vargas Foundation domiciled in Brazil, classified Paraguay as the South American Country with the most favourable investment climate for years 2016, 2017 and 2018 and in 2017 a recent issuance of sovereign bonds was subscribed, which obtained investment margins close to a 40%. “We are successfully accessing the capital international markets and we have large US funds, like those of our investors and this is an excellent signal” explained Cartes”.
THE KEY TO ALL OF THIS
According to the report, the key to success of Cartes Government can be found in the diversification of the economic base of the Country, far beyond its traditional dependence on agriculture – mainly soy, meat and maize – and on electricity export, by promoting in parallel industrial activity, until getting to a GDP equal to 9,5% in 2017. Until 2012 agriculture was about a quarter of GDP, while industry and construction were only 6%. Today the agricultural industry generates 15% of GDP, while industry and construction reach 20%” , according to the former Finance Minister Lea Giménez.
In addition, Cartes constituted a legal framework to promote a public-private alliance, that is a way to respect the deficit of infrastructures of the Country, further encouraging investments in the sector.
It is noted that Cartes constituted a legal framework to promote a public-private alliance, that is a way to respect the deficit of infrastructures of the Country, further encouraging investments in the sector. “Many things greatly contributed to making Paraguay a very attractive Country” she explains “Here there are many young people: up to 70% of our population are under 40. We must take it into account, if we want to compare Paraguay to neighbouring Countries.
Our young people want to work and they are looking forward to new opportunities. Furthermore, they are very efficient”.
THE COUNTRY LABEL
In 2017 he launched the new Country label, focusing on “The breeding economy of Paraguay”. We identified four mature economic drivers for investment and growth”, explains the former Minister for Trade and Industry, Gustavo Leite. “Exportation of foodstuffs around the world, construction of factories for the region, creation of a logistic centre and promoting forests and green energy (otherwise known as sustainable energy).
Currently, Paraguay produces foodstuffs for about 80 millions of people: mainly meat, maize and soy production through technological integration, a better land planning and greater foreign investments in the sector.
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