The Central Bank of Paraguay cut its policy interest rate to 5.75% at its January meeting. The committee cited global developments including IMF estimates showing global growth at 3.3% in 2025 and 2026, while in the US GDP grew 4.4% annualised in Q3 2025, December job gains undershot expectations as unemployment fell to 4.4%, and annual inflation held at 2.7%, with markets still pricing further Federal Reserve cuts in 2026. Internationally oil prices rose amid geopolitical uncertainty despite oversupply expectations, while agricultural prices were mixed with soybeans rising and corn and wheat falling. Domestically the IMAEP grew 4.0% year on year in November supported by services, electricity and water, agriculture and livestock, while manufacturing softened. Inflation continued to ease with the CPI at -0.3% in December, annual inflation ending 2025 at 3.1%, and inflation expectations anchored at 3.5%. The CPM reaffirmed its commitment to price stability.
