Construction was one of the sectors that mitigated the impact of the pandemic on the Gross Domestic Product (GDP) in the second quarter of the year, and has undoubtedly been one of the fundamental tools for economic growth in recent years. Ernesto Figueredo, president of Raíces Real Estate, one of the most prominent companies in this field, in an interview with 5Días gave his perspective on the current economic situation in the country.

According to data from the last Quarterly National Accounts report of the Central Bank of Paraguay (BCP), between April and June 2020 the total production of the GDP had a contraction of -6.5%. However, the fall could have been greater as a result of the pandemic and it is in this same report that the aid represented by construction stands out, since it had a 9% growth in that period.

For Figueredo, works can continue from both the public and private sectors, but certain adjustments must be made, especially by the government, to allow a much effective development.

“For public works we need to innovate more towards public-private partnerships, we cannot continue to grow in public works through debt because that has already run out. That is a conclusion that is quite settled and we need the Government to generate new tools and use those that already exist,” said Figueredo.

He added that one of the pending tasks of the government is to make it more attractive for private capitals that have a sufficient appetite for risk to invest in public works.

When asked about private works, he said that what is needed is less bureaucracy so that the sector can continue to move forward and be a decisive part of the post-pandemic economic consolidation. He recalled that, although there are private works that are advancing at the capital and central area, there is a need to bring progress to the interior of the country as well.

He was conclusive in affirming that, aside from these obstacles, there is growth in the construction sector and an upturn; that it needs the accompaniment of the government as a propitious platform towards the definitive consolidation for the benefit of many more people. This can be clearly seen in the data provided by the headquarter, mentioned above.

He expressed that the pandemic leaves several lessons that should serve the country for the future, making special emphasis on the need to improve both health and education. This, in turn, will bring the opportunity to be much more resilient to external and unpredictable shocks such as this year’s; although some response was given, but late.

“What the pandemic has done is shine a very strong light on our great weaknesses, for example, in education and in the health system. We need to have a Health system prepared to respond to pandemics and other pathologies, and although we knew that before, what we need is to sustain these late responses that were given for Health,” he said.

SIGNS OF RECOVERY

The businessman with more than 15 years of experience at the head of Raíces, mentioned that there are positive signs regarding the higher collection reported by the Undersecretary of State for Taxation (SET), although part of that is only a recovery of all that was lost in the first part of the year. He said that this could be the beginning of a return to normal.

He said he is concerned that the consumption indicators are still not encouraging, so the approval of a rational General Budget of the Nation (PGN) will be key to the recovery. He noted that the requests should be balanced, in order to mark a path of convergence towards a smaller fiscal deficit, much closer to the rule of 1.5% over GDP of the fiscal responsibility law.

“Paraguay has conditions to get ahead, but we have to keep thinking about how to reactivate the economy with more measures, it is not enough what was done so far; we have to keep innovating and improving. We have a Government that still spends badly and we must remember that it is only 20% of the economy and we have to continue giving mechanisms so that this 80% continues to believe and invest,” he said.

ROWING TOWARDS REACTIVATION

He mentioned that all Paraguayans should be aware that, although the impact of this pandemic could be mitigated in our country and we will be among the least impacted, the fall occurred anyway and it is time to “paddle towards recovery”.

He said that the government signals will be fundamental for this and regretted that there is still too much slowness and bureaucracy in several services such as registration, cadastre in the SET, so the processes should be improved to facilitate the formal operation.