Exclusive-Paraguay central bank chief says 2022 inflation seen at 6%, above tolerance range

© . By Daniela Desantis ASUNCION () – Paraguay will end 2022 with inflation close to 6%, the head of the country’s central bank told on Monday, right at the ceiling of the entity’s tolerance range as it fights against fast rising prices driven by global supply shortages of grains and energy. The president of the central bank of the South American country, José Cantero, added in an interview that the benchmark rate should end the year at a level comparable to the current 6.25%. The country has experienced a sharp rise in consumer prices, as a result of the global rise in fuel and food prices, exacerbated by the Russian invasion of Ukraine. Annual inflation was 9.3% in February, the highest in 11 years. “We see the level moving towards 6% by the end of the year and it is expected to converge towards the 4% target by mid-next year,” Cantero said. Cantero said in April the bank would downgrade its forecast of economic growth for this year from 3.7% and also downgrade last year’s official figure of 5%, due to the impact of drought on agricultural production in the United States. the world’s fourth largest exporter of soybeans. “Given the drought impacting the 2021/2022 campaign, we expect growth to be less than 5% in 2021 while at the same time the forecast we had made for 2022 … the revision will be downward,” he said. . Rapidly rising prices in Paraguay have forced the country’s central bank, like others in the region, into a series of rate hikes. Benchmark interest rates have risen by a total of 550 basis points in the past eight monetary policy meetings.

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