Macroeconomic Forecast Paraguay

BMI View: Paraguay's headline consumer price inflation continued to tick up in February, posting 2.8% year-on-year (y-o-y) growth, up from 2.6% y-o-y in January. We expect this upward trend to continue throughout the year as the economic recovery sees the output gap narrow. That said, with month-on-month growth coming in at 0.1% in February, we caution that price pressures are likely to remain muted for the time being, and are forecasting year-end inflation of 4.5% in both 2010 and 2011.

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