Paraguay’s Central Bank (BCP) announced on Thursday in Asunción that after two years of surpassing the target, inflation in 2023 aligned precisely with expectations. Following consecutive years of Consumer Price Index (CPI) exceeding 6% in 2021 and 2022, it came down to 3.7% in 2023. The BCP had set a 4% cap for the year, paving the way for optimistic prospects in the year ahead.
BCP Chief Economist Miguel Mora said that the year-end inflation figure demonstrates the effectiveness of implemented policies to stabilise price fluctuations, alongside a more favourable situation with raw material prices. “We had made a year-end projection at the beginning of 2023, which was 4.5%, but the result we are seeing (3.7%) occurs mainly due to certain surprises, mainly on the side of commodity prices that adjusted downwards in a greater proportion than we had initially anticipated,” he stated.
In December, inflation was 0.3%, in contrast to the -0.2% rate recorded in the same month of the prior year, as per the BCP’s data. Price hikes in food items and services were the primary drivers behind the month’s inflationary trend, although these increases were offset by reductions in fuel prices.
In the food sector, price escalations were predominantly noted in volatile items within the food basket, including fruits, vegetables, and beef. Additionally, there were price hikes in beef substitutes such as pork, poultry, fish, sausages, and offal, while eggs and dairy products, notably cheese, also experienced an uptick.
Prices also saw an upswing in home equipment repairs, vehicle maintenance, taxi fares, intercity buses, urban transport, international bus services, airplane tickets, and cable TV subscriptions, among other commodities.
In terms of year-on-year variations, pasta prices surged by 14.5%, sugar and sweeteners by 26.1%, and vegetables by 29%.
Looking ahead to the next year, Mora indicated that the BCP anticipates inflation to hover around 4%, in line with their stated target.
