The funding will also help boost access to financial services for the country’s most vulnerable groups.
Welcoming the loan, Santiago Peña Palacios, Paraguay’s finance minister, said: ‘This new operation will allow us to take an important step towards strengthening specific social programmes, as well as fiscal sustainability, equity and transparency. Paraguay needs to have at its disposal every financial tool available to fight social inequality, poverty and exclusion.
‘Actions such as these will help us move towards that goal, and also represent a clear signal to the population that we are working to build a better society, an inclusive Paraguay.’
Jesko Hentschel, World Bank director for Argentina, Paraguay and Uruguay, added that as poverty levels in the country declined and economic growth has picked up, the bank wanted to see better-targeted social programmes.
‘Improvement in fiscal policy will favour the sustainability of social programmes; in this way we will contribute to improving the living conditions of the poorest 40% of Paraguayans,’ he said.
Paraguay wants to cut extreme poverty levels to 9% by 2018 and improve the incomes of the poorest 40% of the population.
The World Bank is supporting these ambitions through its 2015-2018 Country Partnership Strategy for Paraguay, under which the latest loan has been made.
