Paraguay’s infra investments up in September but still lower than last year

Investments by Paraguay’s public works ministry (MOPC) increased 24% in September compared to the previous month, but so far this year they remain below the levels seen in 2020 after having set a lower target.

The ministry spent nearly 449bn guaraníes (US$65mn) on public works certificates last month, well above the 362bn guaraníes seen in August, MOPC said in a release.

From January to September, investments reached 2.8tn guaraníes, or 49% of the total estimated for this year of 5.6tn guaraníes.

During the same period last year, investments reached 3.3tn guaraníes, or 61% of the 2020 target.

For 2021, MOPC lowered its investment goal from the record US$1bn seen last year to US$750mn, as the government is trying to rein in a fiscal deficit in the face of the pandemic.

At one point, the proposed budget for 2022 included a 35% cut in MOPC’s funding, due to the country’s fiscal responsibility law setting a deficit target of 1.5% of GDP.

The target was latter increased to 3% of GDP, and it is now estimated that the country will not reach the 1.5% target until 2024.

A source close to the matter confirmed to BNamericas that with the higher deficit target MOPC will see an increase in its 2022 budget equivalent to 1% of GDP (US$408mn), which will come from loans from multilaterals.

The ministry was also forced to stop tenders for new treasury-funded projects since August last year as a result of the fiscal constraints, although already awarded works have not been halted.

MOPC is currently pushing a US$1.5bn PPP and turnkey agenda, alongside plans to award concessions for 3,148km of highways between 2022 and 2027.