Paraguay's current economic policy faces a challenge that could undermine international confidence if the real fiscal figures are not transparent. Economist Sergio Sapena warns of a "cosmetic" approach to fiscal balances that conceals the country's true economic situation.
According to Sapena, contrary to official statements, the real fiscal deficit is around 4%, corresponding to an accumulated debt of approximately 2 billion dollars owed to suppliers, municipalities, and institutions. Despite this discrepancy, the expert asserts that Paraguay would not lose its investment grade if it justified the use of the fiscal deficit to the International Monetary Fund (IMF) and credit rating agencies.
To preserve this rating, Sapena recommends honesty in the numbers and expanding the budgetary space. He suggests that the government leverage its close relationship with U.S. President Donald Trump to request his mediation with the rating agencies and the IMF, presenting a transparent action plan.
To overcome the crisis caused by state debts, the economist proposes raising the deficit to 6%, which would allow injecting about 1.5 billion dollars into strategic sectors such as education, health, and public works. He criticizes the current allocation of resources, highlighting that while only 100 million is allocated to education and another 100 million to health, around 800 million goes to social projects he considers populist.
Sapena emphasizes that the state's main goal should be economic expansion, avoiding the collapse of businesses, and that a mix of policies is needed, including lowering interest rates and increasing the public deficit to stimulate the economy.