The Paraguayan Consumer Price Index (CPI) fell six tenths in August compared to the previous month and now stands at 2.9 % year-on-year, very close to the target range, according to what the Central Bank of Paraguay disclosed on Monday.

The August figure is the lowest since April 2021, the last time inflation was below 3 % in the country (specifically, 2.5 %). Since the slight rebound in prices in November 2022, the index in Paraguay has maintained a downward trend, already accumulating nine months in decline.

The greatest impact on year-on-year inflation in August occurred in goods and services, followed by food items in the shopping basket. In turn, fuel prices again registered a decrease, and this division is in the negative zone for the fifth consecutive month.

Meanwhile, in monthly terms, there has been a deflation of 0.2 %, this being the second time this year that a negative figure has been recorded. For its part, the accumulated rate is 2 %.

In the midst of this context, the central bank decided for the first time after several meetings to reduce interest rates by 25 basis points, to 8.25 %. The continued drop in inflation leads us to anticipate that, at the monetary policy meeting this September, it will once again opt to cut the rate.

Source: dpa

(Reference image source: Las Naves, Europa Press / dpa)

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