We expect Paraguay's economy to contract and its fiscal deficit to widen in 2020 as a result of the COVID-19 pandemic and the downturn in global demand. We expect that a prompt economic recovery in 2021 and the government's commitment to fiscal consolidation will help stabilize Paraguay's debt level and external profile. We are affirming our 'BB/B' long- and short-term sovereign credit ratings on Paraguay. The stable outlook reflects our expectation of only limited long-term deterioration in Paraguay's financial and economic profile based on the government's commitment to fiscal consolidation in the coming years as the economy recovers. On May 5, 2020, S&P Global Ratings affirmed its 'BB/B' long- and short-term sovereign credit ratings on Paraguay. The outlook remains stable.
