Banking sector is set for growth in Paraguay

Subject

Outlook for the banking sector.

Significance

The pledge by the new administration of President Mario Abdo Benitez to continue market-friendly policies is set to benefit banks in terms of loan growth and profitability.

Impacts

• Economic expansion will help banks reduce bad loans and increase their appetite for faster loan growth.
• Progress in financial inclusion will gradually help reduce high economic informality and cash usage.
• The number of banks in the system is likely to decline through mergers and acquisitions (M&A).