OREANDA-NEWS. July 23, 2015. “Mr. Mitsuhiro Furusawa, Deputy Managing Director of the International Monetary Fund (IMF), made the following statement:

“It is a great pleasure to be in Paraguay for my first visit. I had the privilege to meet President Horacio Cartes and members of his government, including Central Bank Governor Carlos Fernandez, Finance Minister Santiago Pe?a, Minister of Public Works and Communications Ramon Jim?nez Gaona, Minister of Agriculture and Livestock Jorge Gattini, and Planning Minister Jos? Molinas. I also had the opportunity to meet with representatives of the private sector and visit several agricultural and industrial sector businesses. I would like to express my gratitude to the Paraguayan people for their warm welcome.

“I am impressed by the vibrancy of this young country, the dynamism of its economy, and the ambitious plans the government has laid out for the future. Steadfast implementation of the reform agenda will help attract investment, raise employment and productivity, and support Paraguay’s economic and social development.

“With activity growing at around 4 percent through the first quarter of this year, Paraguay has continued to perform well in a difficult regional environment. To be sure, the domestic economy is not immune to the effects of weak activity in neighboring countries and the decline in agricultural commodity prices. However, the growth outlook remains relatively favorable, alongside the ongoing transformation and diversification of the Paraguayan economy.

“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.”