Paraguay economy seen growing 6.4 pct in 2007

Reuters    Translate This Article
20 December 2007

ASUNCION, Dec 20 (Reuters) - Paraguay's finance minister said on Thursday the country's economy should grow around 6.4 percent this year, marking a 10-year high thanks mostly to increased exports.

'The central bank made its final estimate of economic activity for this year and growth is closing in around 6.4 percent, above our most optimistic forecast of 5 percent,' Minister Cesar Barreto told radio station Primero de Marzo.

The poor, landlocked South American country relies heavily on agricultural exports, mainly of soybeans and beef. Paraguay is the world's No. 4 soy exporter.

Barreto said overall exports jumped nearly 60 percent this year versus 2006, when the economy grew 4.3 percent.

Regarding inflation, Barreto said it should end the year within official targets. The government aims for inflation of 5 percent, with a margin of plus or minus 2.5 percentage points.

'We had some very difficult months but thanks to the measures that were taken, we've regained control and 2007 will end with inflation of around 5.5 percent, which is a major reduction from the 12.5 percent we had in 2006,' Barreto said.

The minister added that the country's fiscal surplus should remain steady at 0.5 percent of gross domestic product.

(Reporting by Mariel Cristaldo; Translated by Hilary Burke; Editing by Diane Craft)

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