Inflation expectations for the monetary policy horizon fell from 4.5% in October to 4.3% in November, the Central Bank of Paraguay (BCP) reported in its latest report. In this context, after its last meeting, the Monetary Policy Committee (CPM) unanimously decided to keep the interest rate at 8.50% per year, as last month. They point out that the year-over-year inflation trajectory is taken into account, which continues to show moderation with respect to the peak observed in the second quarter.

In the domestic environment, monthly inflation reached 0.4% in October due to rising prices of food, other goods and services, which were offset by the negative impact of the energy segment, he said. However, November saw a renewed increase in local fuel prices which could be reflected in the month’s inflation, however this is timely considering the modest gains in recent months.

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Meanwhile, the Business Figures Estimator (ECN) increased 1.8% year-on-year through increases in items such as vehicles, clothing and pharmaceutical chemicals. On the other hand, fuel and supermarket sales fell compared to the same month the previous year. The Consumer Confidence Index (ICC) rose to 54.9 in October compared to 48.3 in September.

Regional indicators related to short-term activity for various countries recorded positive interannual levels in September. For next year, the economic outlook is revised downwards and in terms of prices, most countries analyzed in the region point to a slowdown in year-on-year inflation in October. It should be noted that while CPM maintains stable interest rates, it will continue to closely monitor the local and international environment, as well as the consequences for the inflation outlook.

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