...Robust Growth: Paraguay's real GDP grew 6.6% in 2025 from 4.7% in 2024, the fastest growth in Latin America and well above the `BB' median of 3.8%. In recent years, private consumption and investment have supported strong growth. Growth was broad-based, including in the mainstay agriculture and hydroelectricity sectors that are sensitive to climate conditions, but also construction, manufacturing and services, supporting greater economic diversification. Fitch Ratings expects growth of 4.5% in 2026, moderating to about 4% thereafter, but a sizeable pipeline of investment projects provides potential for stronger performance. FX Appreciation Supports Lower Inflation: Inflation peaked at 2.4% in May 2026, after the global energy price shock, and had fallen to the 1.5% lower bound of the central bank's tolerance range by August. Paraguay's reliance on hydroelectricity and significant FX appreciation have helped to shield the economy from the oil price spike and contain inflation. Inflation...
