Paraguay Systematic Country Diagnostic

Paraguay has been characterized by solid economic growth, strong poverty reduction and macroeconomic stability in recent years. An adjustment of the development model, however, should increase sustainability and inclusiveness in the future. Economic growth has been above the regional average. Macroeconomic stability has been achieved; inflation is under control and public debt is low. Poverty reduction has been substantial, and several social indicators have shown significant improvements. Apart from solid macroeconomic policy, growth has been based on extensive leveraging of the country’s natural wealth, particularly land and hydroelectric potential. Demographic change in Paraguay has also led to a sizable expansion of the working-age population, adding to economic output. However, if the current model is adjusted, the sustainability of these achievements could be increased substantially, since two of the main sources of growth in the past decade (natural capital and the demographic bonus) will slowly reduce their contribution to growth. These adjustments should focus on overcoming the main obstacles that this report identified as critical challenges for a sustainable development: (a) concentration of inputs, production, exports, income, and political influence; (b) prevalence of informal economic relations; and (c) delivery of public services. To meet the population’s expectations, higher growth is needed, but, even more importantly, this growth needs to become inclusive and sustainable in the medium- and long-term. The pathways toward this goal will need to overcome the mutually reinforcing challenges mentioned above. To that end, the SCD has identified the following priority areas: accountable institutions, rule of law, and business environment; natural wealth management; quality of public services; and human capital.

Bibliographic Details

Main Author:	World Bank Group
Format:	Report biblioteca
Language:	English
Published:	World Bank, Washington, DC 2018-06-27
Subjects:	ACCOUNTABILITY, BUSINESS ENVIRONMENT, RULE OF LAW, NATURAL RESOURCE DEVELOPMENT, PUBLIC SECTOR MANAGEMENT, HUMAN CAPITAL, TWIN GOALS, POVERTY, ECONOMIC DEVELOPMENT, MACROECONOMIC POLICY, LABOR, INCLUSIVE GROWTH, SERVICE DELIVERY, SOCIAL SUSTAINABILITY, FISCAL SUSTAINABILITY, ENVIRONMENTAL SUSTAINABILITY, PRIORITIES, SHARED PROSPERITY, PUBLIC EXPENDITURE,
Online Access:	http://documents.worldbank.org/curated/en/827731530819395899/Paraguay-Systematic-Country-Diagnostic https://hdl.handle.net/10986/30053
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