Paraguay production guilds seek dialogue over falling dollar value

The Union of Production Guilds (UGP) has expressed concern regarding a sustained decline in the US dollar exchange rate, which has lasted approximately 16 months. Héctor Cristaldo, president of the UGP, noted that the depreciation has reduced income for productive, industrial, and export sectors by roughly 25% when converted to guaraníes.

This trend affects various industries, including meat production, manufacturing, maquiladoras, and real estate development. While these sectors receive income in dollars, they face operational costs primarily in local currency, creating a significant gap in covering expenses.

In response, Paraguay’s National Economic Team, led by Minister of Economy and Finance Oscar Lovera, has agreed to meet with production and commerce representatives next week. The government aims to analyze the effects of the guaraní’s appreciation on economic activity.

Minister Lovera stated that the Central Bank of Paraguay (BCP) has not identified speculative movements that would justify market intervention. Additionally, the falling dollar is impacting state revenue, specifically customs collections, contributing to a slowdown in tax growth, which currently stands at 2.3% compared to the projected 8% for the year.