ASUNCION, Feb 20 (Reuters) - Paraguay’s current account will swing into deficit in 2015 for the first time in three years, hurt by low global commodity prices and anaemic growth in the economies of key regional trading partners, the International Monetary Fund said on Friday.
IMF data showed a deficit in Paraguay’s current account of 1.2 percent of gross domestic product, compared with surpluses of 0.1 percent in 2014 and 2.2 percent in 2013.
This metric includes balance of trade, net income from abroad and net current transfers.
“Weak trading partner growth and lower export prices cloud the outlook,” the IMF said in a statement, maintaining its forecast for the $30 billion economy to grow 4 percent this year.
The IMF forecast inflation would hover around the 4.5 percent target level in 2015, slightly higher than the 4.2 percent increase in Paraguayan consumer prices last year.
The Washington-based body said the world’s fourth-biggest soybean exporter needed to do more to boost tax collections and rein in current expenditures to reduce a fiscal deficit that is more than double the country’s own legal limit of 1.5 percent of GDP.
“It is thus unfortunate that the approved 2015 budget envisages spending and a deficit above the mandated limits,” the IMF said.
Santiago Pena, Paraguay’s new 36-year-old finance minister, said in January that he had the full-backing of the president to tame public spending and bring the budget deficit down to the 1.5 percent cap.
The 2015 budget calls for a deficit of 3.4 percent of GDP. Pena did not say how quickly he planned to reduce it. (Reporting by Mariel Cristaldo; Writing by Richard Lough; Editing by Lisa Von Ahn)