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Paraguay economy seen rebounding with 10.5 pct growth in 2013
December 26, 2012 / 5:30 PM / 5 years ago

Paraguay economy seen rebounding with 10.5 pct growth in 2013

* Record soy harvest, beef export revival fuel recovery

* 2012 contraction expected at a revised 1.2 percent

ASUNCION, Dec 26 (Reuters) - Paraguay’s economy will shrink 1.2 percent this year due to a poor soy harvest and a foot-and-mouth disease outbreak that hit beef exports, but it should grow a robust 10.5 percent in 2013, the central bank said on Wednesday.

The monetary authority previously forecast this year’s contraction in gross domestic product at 1.5 percent. Next year’s expansion had earlier been seen at 9.5 percent.

“We’ve made an upward revision for this year’s GDP, mainly as a result of the third-quarter data,” bank official Miguel Mora told reporters. “The estimate for 2013 on the other hand is based on the recovery of agriculture and ranching.”

Paraguay is the world’s No. 4 soy exporter, though it trails far behind neighboring farm giants Brazil and Argentina. A sharp drought slashed production just as the foot-and-mouth disease outbreak wreaked havoc for cattle ranchers.

Farmers’ luck has improved this season, however. A record soybean harvest is forecast and the country has won back former markets for its beef exports.

In early December, the International Monetary Fund raised its forecast for Paraguay’s 2013 economic growth to 11 percent, saying good weather should bump up farm production and a planned bond issue would likely fill government coffers.

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