April 12, 2013 / 5:11 PM / 5 years ago

Paraguay central bank raises 2013 growth forecast to 13 percent

* Record soy harvest, beef export revival fuel recovery

* Economy contracted an estimated 1.2 pct in 2012

ASUNCION, April 12 (Reuters) - Paraguay’s central bank raised its 2013 economic growth outlook on Friday to 13 percent, from 10.5 percent previously, citing a sharp rebound in agricultural and beef production.

A drought in the poor, landlocked South American country slashed soybean output in 2012 and forced a roughly 1.2 percent economic contraction. Paraguay is the world’s No. 4 soy exporter, though it lags far behind the top three global suppliers.

The central bank revision was announced nine days before a presidential election in Paraguay, where the ruling Liberal Party is polling in second place behind the historically powerful Colorado Party.

Paraguay is on track to harvest a record soy crop this year, and the beef and livestock sectors are flourishing after an outbreak of foot-and-mouth disease in 2011 hurt exports. The central bank said construction would also help fuel the rebound.

Gross domestic product totals about $33 billion in Paraguay, the bank said. The country debuted on global credit markets in January with the sale of $500 million in 10-year bonds, and more international debt could be issued in the future.

In December, the International Monetary Fund raised its 2013 economic growth forecast for Paraguay to 11 percent.

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