The year 2006 was dominated by political events. Early in the year the Colorado Party held internal elections and had President Duarte Frutos was elected as its President, even though he was constitutionally forbidden from running. This set up the ground for a deep political crisis and a climate of permanent confrontation. The opposition gained the upper hand with a massive demonstration against the violation of the Constitution. President Duarte responded with a tactical retreat but soon opened a new front seeking to force a constitutional reform to allow him to run for re-election. In this climate of tensions municipal elections were held in November and the results by and large left unchanged the electoral scenario of the previous ones, held in 2001. The other major event was the emergence of the political figure of former Bishop Fernando Lugo, who resigned his position and became the key opposition contestant for the presidential elections of 2008. In the economic front the situation remained stable, with most macroeconomic indicators under control, except inflation which
rose dramatically, and sluggish growth. The social situation, however, exhibited the continuation of high levels of poverty, increasing social malaise, and the disruptive effects of the massive migration to Spain and other developed countries.