NEW YORK, Jan 10 (Reuters) - Fitch assigned Paraguay an initial rating of BB-minus with a stable outlook on Thursday, saying the grade balanced the country's strong balance sheets against factors such as commodity dependence and economic volatility.
"The Paraguayan economy has shown higher average growth rates relative to the 'BB' median, but growth volatility has also been greater due to the large size of its agriculture sector and the negative shocks it receives from adverse weather cycles," the rating agency said in a statement.
Paraguay's economy shrank 1.2 percent last year due to a poor soy harvest and a foot-and-mouth disease outbreak that hit beef exports, but the central bank expects a 10.5 percent bounce in 2013.
Moody's Investors Service rates the country Ba3 with a stable outlook. Standard & Poor's rates the country BB-minus, also with a stable outlook.