OREANDA-NEWS. July 22, 2015. “Paraguay’s robust performance is underpinned by sound macroeconomic fundamentals. Public debt is moderate, inflation is low, the external current account is close to balance, and official reserve holdings are ample. These sound fundamentals are the bedrock of macroeconomic stability in a volatile environment. They ensure that Paraguay has buffers to absorb adverse shocks and provide confidence to households, entrepreneurs, and financial investors.

“Macroeconomic policy frameworks have been strengthened further in recent years. The Central Bank has successfully transitioned to an inflation targeting regime, coupled with greater flexibility of the exchange rate. Meanwhile, the Fiscal Responsibility Law has introduced a set of rules aimed at keeping public debt sustainable. Achieving this objective while pursuing an appropriate rise in public investment will require continued efforts to strengthen the budget process, improve tax collection, and rationalize current spending.

“The authorities have also initiated welcome steps to upgrade the regulation and supervision of the financial sector. Vigilant monitoring of the financial system is crucial to contain risks after an extended period of strong credit growth.

“To secure sustained and inclusive growth, the authorities have launched an ambitious program of improving Paraguay’s physical infrastructure, enhancing public services, and alleviating poverty. These are important reform objectives that deserve unwavering support.

“In sum, the challenge for Paraguay is two-fold: to achieve a significant structural transformation of the economy while cementing macroeconomic stability. I am optimistic about Paraguay’s prospects and impressed by the authorities’ determination to succeed. The IMF remains committed to help Paraguay in this endeavor.”