Macroeconomic Forecast Paraguay

BMI View: Paraguay's consumer price inflation continued to lose steam in March, coming in at 0.5% m-o-m and just 3.3% y-o-y. The collapse of meat prices in the wake of two foot-and-mouth disease outbreaks in the region of San Pedro explain much of the decline in food prices observed in Q411 and Q112. While we rule out a return of Paraguayan inflation to its 2011 highs in the near future, we see potential for a more sustained uptick in prices in H212, informing our end-2012 inflation forecast of 4.5% y-o-y.

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