Macroeconomic Forecast Paraguay

Paraguay's economy looks set for a strong rebound in 2010 (following upon last year's recession, when real GDP contracted 3.7%), with recently released data from the central bank showing growth of 10.9% y-o-y in the first quarter of the year. The agriculture and construction sectors were the key factors bolstering the headline growth figure, expanding 28% y-o-y and 12% respectively. Going forward, we believe the agricultural sector in particular could be the key factor propelling growth over the coming quarters, particularly should China's ongoing blockade of Argentine soy imports result in greater demand for Paraguay's products.

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