ASUNCION, Dec 12 (Reuters) - The International Monetary Fund on Thursday forecast Paraguay's economy would expand 4 percent in 2015 but cautioned low commodity prices and stagnant growth in South America's economic powerhouses might weaken the outlook.
The IMF's estimate is below the Paraguayan central bank's projection of 4.5 to 5 percent growth next year, which the bank says will be underpinned by a recovery in energy exports, an expansion of farm area and infrastructure projects.
Andre Meier, head of an IMF mission to the world's fourth-biggest soybean exporter, said Paraguay needed to combat tax evasion and rein in current expenditure to narrow a fiscal deficit that exceeds the country's own limit set down in law.
Neighboring Argentina's economy has flatlined this year, hobbled by tight trade and currency controls, while economists expect Brazil's economy to grow just 0.2 percent after entering a recession in the first half of the year. (Reporting by Daniela Desantis Writing by Richard Lough; Editing by James Dalgleish)