Asunción, Paraguay - According to a report released by the Central Bank of Paraguay (BCP), Paraguay's economic activity indicator (Imaep) grew by 4.9% year-on-year in February of this year, continuing its robust growth trend. The cumulative growth rate for the year also reached 5.9%, demonstrating the dynamic flow of the economy.
In a press release, the BCP stated that "various sectors driving the domestic economy showed favorable year-on-year growth during the first two months of this year." In particular, key sectors such as services, manufacturing, electricity generation, livestock, and construction led the positive growth.
Looking at the details, most service sectors showed active movement, including overall services, transportation, commerce, government services, financial intermediation, household services, food and accommodation services, telecommunications, real estate, information services, and business services. In the manufacturing sector, the production of meat, dairy products, milling and bakery products, beverages and tobacco, chemical products, textiles and clothing, paper and paper products, metal products, and machinery and equipment drove growth. Increased electricity production at the Itaipu and Yacyretá hydroelectric power plants and electricity distribution also had a positive impact, and the livestock sector showed growth thanks to increased cattle and pig slaughtering. However, a decrease in poultry slaughtering and a decline in crude oil and egg production limited the scope of livestock growth. The construction sector showed significant growth, boosted by active private and public sector construction activities.
However, considering that the economic growth rate in January was 6.7%, the 4.9% growth in February indicates a slight slowdown, suggesting the possibility of a future deceleration in growth. Excluding agriculture and the two major hydroelectric power plants (Itaipu and Yacyretá), the Imaep index grew by 6.0% year-on-year in February, with a cumulative growth rate of 7.5%. This is somewhat lower than the year-on-year growth rate of 8.7% recorded in January.
The sluggishness in the agricultural sector was a major factor in this slowdown. Citing data from the Ministry of Agriculture and Livestock (MAG), the BCP analyzed the forecast for the 2024/2025 harvest season and reported that the agricultural sector contracted year-on-year in February, particularly due to a decrease in soybean production. In the manufacturing sector, the production of oils, sugar, leather and footwear, wood, non-metallic minerals, and common metals also decreased, affecting the overall slowdown in growth.
In conclusion, while Paraguay's economy maintained solid growth in February, there are signs of a slowdown in the growth rate due to the sluggishness of the agricultural sector and the decrease in production of some manufacturing items. It is necessary to continuously monitor future economic growth trends.
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