Paraguay has shown increasing resilience to negative economic trends in the region. We expect 4% GDP growth in 2015 despite a drought affecting electricity generation, economic recession in key trade partners, and lower soya prices. We believe the government will maintain its cautious economic policy over the next two to three years despite traditional pressures emerging from the electoral calendar. We are revising our outlook on Paraguay to positive from stable, and we are affirming our 'BB/B' foreign and local currency sovereign credit ratings. The positive outlook reflects our expectation for prudent macroeconomic policy implementation, continuous support for greater economic institutionalization (for example, in the debt management office), and gradual improvements in economic diversification that could increasingly limit Paraguay's vulnerability
