Economy

Paraguay is among the countries with the lowest investment risk in Latin America

Among the countries with the highest risk rate in the region is Venezuela, followed by Argentina and Ecuador

Friendship Bridge in Paraguay
At the Friendship Bridge, the Paraguayan Navy uses vessels and an aircraft to monitor the border and avoid traffic between Brazil and Paraguay. Photo: Shutterstock
  • Paraguay is the fifth country in Latin America with the lowest investment risk rate, after Peru, Uruguay, Chile and Colombia;
  • Among the countries with the highest risk rate in the region is Venezuela, followed by Argentina and Ecuador;
  • The country’s Director of Debt Policy Iván Haas said that Paraguay is better positioned than all of Latin America as a whole, which is placed around 411 basis points. “Paraguay is very well positioned at the regional level,” he stressed.

According to data from Paraguay’s Ministry of Finance, Paraguay (212 basis points as of January 28) is among the five Latin American countries with the lowest investment risk rate, along with Peru (133), Uruguay (144), Chile (145) and Colombia (225), as reported by Colombian news outlet La República.

Among the countries with the highest risk rate in the region is Venezuela, with 24,496 points, followed by Argentina with 1,444; Ecuador with 1,242. Bolivia recorded 485 points and Brazil, 281.

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EMBI, the emerging markets bond index, is a benchmark index that measures the relationship between the interests of the dollar-denominated bonds, issued by emerging countries, and the United States Treasury bonds, considered as risk-free.

With these results, Paraguay is almost in the same position as the investment-grade countries, something that, according to the country’s Director of Debt Policy, Iván Haas, is due to Paraguay’s ability to meet its external commitments either in capital or interest.

Haas said that Paraguay is now better positioned than an investment-grade country such as Mexico (389), and better than all of Latin America as a whole, which is placed around 411 basis points. “Paraguay is very well positioned at the regional level,” he stressed.

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Haas also emphasized that this number is highly variable since it depends on many factors and is greatly influenced by what happens internationally.

“Before the pandemic, we were at similar levels to now, but when all the strict quarantines emerged, all the concern worldwide, our EMBI reached 513, at the end of March, which was the time with the most uncertainty in markets,” he recalled.

Haas added that current numbers mean the market is more confident, with less uncertainty and as long as it remains calm there will be no major changes.

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