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Paraguay sees record FDI on strong macroeconomic stability

In a recent report by the Central Bank of Paraguay, it was revealed that direct investment in the South American nation reached an all-time high of US$725 million in 2022, a substantial increase of US$540 million from the previous year.

The BCP's report highlighted a positive net flow of investments, driven by gross inflows of US$2.23 billion and gross outflows of US$1.505 billion. The volatile global economic landscape allowed Paraguay to attract investments originally earmarked for other regions, solidifying its status as an attractive destination for investors, reports Mercopress.

Paraguay's favorable investment climate can be attributed to its macroeconomic stability and the pro-business policies implemented by the new government under President Santiago Peña. The nation has demonstrated optimal conditions for investments, with various projects in the pipeline, including biofuels, green hydrogen, meat processing plants, and the cellulose industry, expected to significantly impact its manufacturing and primary sectors.

However, external economic factors, such as interest rates in developed countries, may be affecting the pace of certain projects. Nevertheless, Paraguay continues to draw in greater investment flows, reaffirming its significance as a driving force in the country's economic development.

Breaking down the 2022 investment landscape, net direct investment flows increased notably in sectors like financial intermediation, commerce, chemical production, oil processing, and metal products. On the flip side, sectors such as communication, livestock, transportation, and machinery and equipment experienced a decrease in net flows. Despite these variations, direct investment remains a cornerstone of Paraguay's economic growth, with promising prospects pointing toward the sustained positive investment flow in the foreseeable future.

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