Economic Survey of Latin America and the Caribbean 2008-2009

Policies for Creating Quality Jobs

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This publication comes at a critical point in the economic development of the Latin American and Caribbean region. A growth phase that the region's recent history cannot equal in nature and duration has come to an end and output is contracting. The first part of this edition looks at the channels through which the crisis is affecting the economies of the region and its impact on variables such as economic growth, employment and external-sector indicators. It also discusses the strengths and weaknesses of the countries and concludes with a discussion of the outlook for the second half of the year. The second part discusses policies for creating quality jobs, including challenges and opportunities for labor institutions and labor markets, labor-market policies for youth and women. This CD-ROM also contains the electronic versions of the printed publication. The statistical information reflects data available up to 30 June 2009.




The Paraguayan economy grew by 5.8% in 2008, marking six consecutive years of economic expansion. This result was due to the performance of the external sector, which was positive due to the price boom for its principal export products and a favourable harvest. Domestic demand was also significantly buoyant, reflecting an increase in private consumption and in investment. The first two quarters of 2008 were characterized by robust economic activity, while the third quarter showed a deceleration and, in some sectors, even a decline. It was a good year for agriculture and livestock, and industry recovered, owing, in particular, to significant growth in construction and machinery production. The year ended with balanced fiscal accounts, attaining a surplus of 2.6% of GDP and a primary balance of 3.3%. Inflation reached 7.5% in December but is expected to fall in 2009. The current account deficit (2.2% of GDP) was larger than in the previous years and is expected to widen in 2009. Economic growth is projected to decline sharply, continuing the less favourable trend that began during the second half of 2008. This slowdown will be caused by, among other factors, a drop in income from the external sector and a less buoyant agricultural activity on account of the drought. A growth rate of 3% is projected for 2009.


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