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Paraguay economy due to contract 2.5% in 2020 due to coronavirus -cenbank

Paraguay's economy will contract 2.5% in 2020 due to the halt in economic activities brought on by social isolation measures to contain coronavirus, the central bank said on Tuesday.

ASUNCION, April 28 (Reuters) - Paraguay's economy will contract 2.5% in 2020 due to the halt in economic activities brought on by social isolation measures to contain coronavirus, the central bank said on Tuesday.

The projection is a stark turnaround from the bank's December 2019 estimate of 4.1% growth in the year. The bank's new estimate also goes further than the International Monetary Fund, which projected in mid-April a contraction of 1.0%.

"The government has taken drastic measures to slow down the spread of the virus and these measures had an impact on economic activities," said Cesar Rojas, a central bank analyst, adding that he expects the economy to gradually recover after the second half of the year.

Paraguay ordered a strict quarantine in early March, days after registering its first coronavirus case. The country has 230 confirmed cases and nine deaths, according to the health ministry.

The government has said it plans to stage a gradual opening of economic activities beginning in May.

(Reporting by Daniela Desantis; writing by Cassandra Garrison; Editing by Cynthia Osterman)

((Cassandra.Garrison@thomsonreuters.com; +54 11 5830 7443;))

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