Paraguay recorded deflation of 0.3% in June, reducing the year-on-year inflation rate to 2.1%, according to data from the Central Bank of Paraguay (BCP). The cumulative inflation for the first half of the year stood at 0.8%, keeping the country among the economies with the smallest price variations in Latin America.
Regional comparisons with May data show that Paraguay had the second lowest year-on-year inflation in the region, at 2.4%, behind only Ecuador (0.9%). Other countries such as Uruguay (3.8%), Chile (3.9%), Peru (3.9%), Mexico (3.9%), Brazil (4.7%), and Colombia (5.8%) posted higher rates. Argentina and Bolivia continued to have the highest rates, both at 33.6%.
The June deflation was driven mainly by falling food prices, especially fruits, vegetables, and meats, in addition to fuels and imported durable goods. On the other hand, services, non-alcoholic beverages, and fish recorded increases.
This result keeps Paraguayan inflation below the center of the BCP's target, which is set at 3.5%, with a tolerance margin of two percentage points. Despite the slowdown, international uncertainties related to commodity and energy prices persist, with heterogeneous paces among different economies.