Paraguay Economic Forecast

Paraguay Economic Outlook

October 13, 2020

The economy contracted notably in Q2, with GDP falling 6.5% year-on-year, contrasting Q1’s 4.4% expansion. Both household spending and investment activity plunged in the quarter, hit by the pandemic and its associated containment measures. That said, the external sector contributed positively to growth as imports slumped at a sharper pace than exports—cushioning the downturn somewhat—while fixed capital formation and government consumption continued to grow, albeit timidly. Available indicators suggest the economy started to recover in Q3, although only gradually. Economic activity expanded slightly in July, while exports continued to contract in the quarter, albeit at a much softer pace than in Q2. On a less positive note, Congress declared a national emergency on 1 October due to extended wildfires, which could restrain the recovery ahead.

Paraguay Economic Growth

This year, the economy will suffer from the blow dealt by the pandemic and its associated restrictions, although the country should perform better than its regional peers. Next year, GDP should rebound solidly, supported by recovering household and capital spending and as international trade resumes. Nevertheless, further waves of Covid-19 infections cloud the outlook. FocusEconomics panelists foresee the economy contracting 3.0% in 2020 before expanding 3.7% in 2021, which is down 0.7 percentage points from last month’s estimate.

Paraguay Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)5,3485,2485,5965,7275,335
GDP (USD bn)
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-
Industrial Production (annual variation in %)-  -  -  -  -  
Unemployment Rate5.
Fiscal Balance (% of GDP)-1.3-1.1-1.1-1.3-2.8
Public Debt (% of GDP)15.117.318.219.421.3
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Benchmark Interest Rate (%)9.638.577.818.58-  
Exchange Rate (vs USD)5,7825,8485,5885,9616,453
Exchange Rate (vs USD, aop)5,2105,6835,6325,7316,238
Current Account (% of GDP)-
Current Account Balance (USD bn)-
Trade Balance (USD billion)
Exports (USD billion)
Imports (USD billion)10.39.811.512.912.2
Exports (annual variation in %)-15.37.911.92.5-7.6
Imports (annual variation in %)-14.7-5.117.912.0-5.2
International Reserves (USD)
External Debt (% of GDP)44.645.140.939.1-  

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Paraguay Facts

Value Change Date
Exchange Rate6,4530.18 %Jan 01

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