flag Paraguay Paraguay: Economic Outline

Economic Indicators

Even though Paraguay is among the poorest countries in South America, it has experienced steady growth in the past decade, with an average annual GDP growth rate of 3.2%. As 80% of direct exports and at least 17% of output rely on agriculture, livestock, and hydropower, the country is vulnerable to fluctuations in commodity prices and weather conditions. The World Bank estimated growth at 4.7% in 2023, thanks to favorable weather conditions. In 2024, the economy is expected to grow by 3.8%, assuming no major weather disruptions. Fixed investment growth is anticipated to accelerate, driven by around 10% of GDP investments in sectors like pulp, biofuels, and green hydrogen. Private consumption growth is likely to speed up as average inflation remains within target. Growth is forecasted to slightly ease to 3.6% in 2025-2026, driven by intensified fiscal consolidation efforts (World Bank).

Concerning public finances, in 2023, the fiscal deficit reached 4.1% of GDP, surpassing the original target by 1.8 percentage points. This increase was mainly attributed to the settlement of government arrears totaling around US$600 million (approximately 1.1% of GDP), elevated interest payments and social transfers, and decreased corporate income tax receipts resulting from the 2022 drought. Consequently, public debt rose to an estimated 38.2% of GDP, predominantly denominated in foreign currency (data from the World Bank). Since 2013, Paraguay has adopted a Tax Responsibility Law, which sets the limit of the authorized fiscal deficit at 1.5% of GDP; although the limit has not been respected, the authorities are committed to achieving the target by 2026, implying substantial cuts in personnel and capital spending and therefore slower government consumption and investment growth in the upcoming future. To mitigate its foreign exchange exposure, Paraguay effectively issued USD 500 million in Guaraní-indexed sovereign bonds for the first time in February 2024, in addition to USD 500 million in USD-denominated bonds. In February 2024, year-on-year headline inflation decreased to 2.9% from 3.4% in January and 3.7% in December 2023, comfortably within the target range of 2-6%. Core inflation also dropped slightly from 4.7% to 4.6%, although it remained above the midpoint. The Central Bank proceeded to reduce rates in January and February 2024, with a total cut of 50 basis points, resulting in the policy rate reaching 6%.

Paraguay has the lowest unemployment rate in the Mercosur area, which was an estimated 5.6% in 2023. However, approximately 19% of Paraguayans lived below the international poverty line for upper-middle-income countries, which was set at USD 6.85 per person per day in 2017 PPP. This figure is only 5 percentage points lower than that recorded in 2013, and 35 percent of the population remains vulnerable to poverty. Paraguay’s GDP per capita (PPP) was estimated at USD 15,982 in 2022, but high inequality persists, indicated by a Gini coefficient of 45 points, highlighting disparities in human capital across the population.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 41.9543.8745.8248.0351.40
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 5,6285,8075,9846,1916,537
General Government Balance (in % of GDP) -3.1-4.5-2.9-2.3-1.9
General Government Gross Debt (in % of GDP) 40.540.343.141.741.1
Inflation Rate (%)
Current Account (billions USD) -2.990.100.260.720.73
Current Account (in % of GDP) -

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
Paraguayan Guarani (PYG) - Average Annual Exchange Rate For 1 GBP 7,656.307,231.557,647.587,800.888,680.90

Source: World Bank - Latest available data.


Main Sectors of Industry

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 19.7 19.5 60.8
Value Added (in % of GDP) 11.3 33.2 48.3
Value Added (Annual % Change) -8.7 0.4 1.6

Source: World Bank - Latest available data.

Socio-Demographic Indicators 2024 (e)2025 (e)2026 (e)
Unemployment Rate (%)

Source: IMF – World Economic Outlook Database - Latest available data


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The Active Population in Figures

Labour Force 3,534,8623,625,0513,562,864

Source: International Labour Organization, ILOSTAT database

Total activity rate 73.78%75.49%76.18%
Men activity rate 87.01%87.65%88.10%
Women activity rate 59.99%62.82%63.76%

Source: International Labour Organization, ILOSTAT database


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.


Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Partly Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

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Sources of General Economic Information

Main Online Newspapers and Portals
Última Hora (in Spanish)
La Nación (in Spanish)
Merco Press (in English)
Paraguay Newspapers online
Useful Resources
Ministry of Finance
Ministry of Industry and Commerce
Ministry of Foreign Affairs
Ministry of Interior
Ministry of the Environment and Sustainable Development
Ministry of Justice
Official list of ministries and their websites
Central Bank of Paraguay

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Latest Update: May 2024