Paraguay’s new central bank chairman Jose Cantero has told global investors the country’s economy boasts more stability than Argentina and Brazil.
The central bank forecast inflation at about 4 percent for 2019. According to Cantero, the central bank’s benchmark rate that has been kept at 5.25 percent since August 2017 is close to neutral.
Additionally, Cantero said that among South American countries, Paraguay has one of the fastest-growing economies.
Although Cantero acknowledges that there could be some possible challenges in furthering the country’s economic growth -- such as ensuring a good and clear communication for a central bank -- he is ready to roll out a new strategy for the bank that may involve less dependence on economic jargon and conducting policy meetings in provinces to enable proper communication with local leaders.
Taking into account Argentina’s recent experience, Cantero views communication as key to anchoring inflation expectations.
“Our communication strategy probably has to be more prompt in the sense of helping these big multinationals understand that Paraguay is different,” the chairman said.
Cantero says Paraguay can achieve its economic goals if the national leadership offers investors “institutional certainty” by improving government spending and education.
“Our bonds for some time have traded like we are investment-grade,” Cantero said.
The World Bank validates that Paraguay has achieved an impressive economy over the past 15 years and the economic growth remains strong.