This report supplements our research update "Paraguay 'BB-/B' Sovereign Ratings Affirmed; Outlook Remains Stable," published on Dec. 6, 2013. To provide the most current information, we may cite more recent data than that stated in the previous publication. These differences have been determined not to be sufficiently significant to affect the rating and our main conclusions. Paraguay's developing political institutions, less developed and volatile economy, and limited monetary flexibility constrain the ratings. The ratings are supported by its solid fiscal position, low government debt burden, and sound external indicators, though there are inconsistencies in the external data. Despite the improvements in the country's economic fundamentals, still-developing institutional capacity--as highlighted in areas such as debt management and financial supervision--remains a rating
