Zero Inflation in Paraguay Is “At Least Remarkable,” Economist Says

Zero monthly inflation in Paraguay in August has collided with what consumers are paying for fuel, transport and food. The Central Bank of Paraguay recorded no change in the consumer price index, even as private fuel companies and Petropar raised prices.

Economist Luis Rojas said the figure does not mean prices have returned to affordable levels. It means only that, on average, they did not rise further during the month. He called the August result “at least remarkable” given the increase in fuel prices, which affects transport, freight and much of the economy.

Rojas said different types of diesel and gasoline rose by about 30% between February and August. Yet those increases did not produce a positive monthly change in the consumer price index. In his view, the contrast shows the limits of using a single month’s inflation figure as a complete measure of the cost of living.

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At least remarkable.

A similar pattern appeared in July, he said. The legal minimum wage rose by 5%, but the consumer price index fell slightly, according to central bank data cited by Rojas. “There was no price increase in either July or August” in the overall indicator, he observed, despite the wage adjustment and fuel increases.

The price of beef shows why zero monthly inflation does not mean that goods have become cheap. Rojas said meat had risen about 30% on average over the past two years, with differences between cuts. A zero figure for August means only that meat did not record significant new increases that month, while its accumulated price remains high.

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There was no price increase in either July or August.