Paraguay central bank raises growth forecast amid currency concerns

Paraguay economy Banco Central del Paraguay currency appreciation livestock sector inflation forecast

Paraguay’s central bank, Banco Central del Paraguay (BCP), has raised its 2026 economic growth forecast to 5% from 4.5% and lowered its end-of-year inflation forecast to 3%. The bank maintained its key interest rate at 5.5%.

Despite these positive macroeconomic outlooks, various production sectors are warning of significant challenges caused by the appreciation of the guaraní against the US dollar. The Unión de Gremios de la Producción (UGP) and the Asociación Paraguaya de Productores y Exportadores de Carne (APPEC) have expressed concern that the falling dollar reduces the local currency income for exporters, thereby compromising profitability and international competitiveness.

In the livestock sector, the Asociación Rural del Paraguay (ARP) noted that while cattle prices have risen, the strength of the guaraní has offset these gains for producers. Meanwhile, BCP President Carlos Carvallo Spalding was recently recognized by LatinFinance as ‘Central Bank Governor of the Year 2026’ for his efforts in managing inflation amid external economic pressures.