Abstract
Paraguay continues to recover from the COVID-19 pandemic amidst simultaneous shocks that would lead to flat GDP growth and inflation above the IT range this year. Those conditions are reflected in rising social demands within a politicized environment before the 2023 general elections. The outlook remains favorable, and the authorities are pursuing policies to follow a stronger, more resilient, and inclusive development path. On the back of very positive experiences with Fund-supported programs, the authorities are requesting approval of a two-year program supported by the Policy Coordination Instrument (PCI) to underpin the implementation of needed structural reforms.
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