Feeding the world might not seem a bad strategy for a country
at a time when global demand for food is set to increase for
years to come. But for Paraguay, being an agricultural producer
is not enough.
PARAGUAY | Macro-economy: Boom and bust
A new investor-friendly legal framework and efforts to improve infrastructure are key to Paraguay’s efforts to diversify its economy
Rollercoaster economic growth reflects lack of
diversification — and overdependence on agriculture
and its star products, soya beans and meat. It has exposed the
economy to sharp ups and downs.
Paraguay has taken advantage of the commodity boom of the
past decade to accumulate international reserves. But lousy
weather conditions also plunged it into recession in 2009 (-
4%) and 2012 (-1.2%).
The economy bounced back strongly last year on the back of a
bumper harvest. But that does not fool anyone at home.
"Last year was not a normal year. We grew at more than 13%,"
says Carlos Fernández, Paraguay’s central
bank governor. "This year we are still growing, but growing
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