Paraguay Economic Forecast

Paraguay Economic Outlook

June 14, 2022

The economy has had a poor start to the year. Following tepid growth in January, activity contracted over 5% year on year in February–April, amid lower soybean production as a result of drought. Moreover, a much higher unemployment rate in Q1, double-digit inflation and tepid consumer sentiment have likely weighed on household spending. These factors more than offset the boost from the removal of virtually all remaining Covid-19 restrictions in February, and strong credit growth through April. In mid-May, S&P Global Ratings confirmed its ‘BB’ rating despite the adverse economic impact of the drought, citing fiscal prudence and robust medium-term growth prospects. In other news, the government recently announced a minimum wage increase of 11.4%. While this should provide support to spending in the near term, the move could also be inflationary.

Paraguay Economic Growth

Economic growth is set to slow dramatically this year; the severe drought the country is experiencing has led to a sharp downgrade of growth prospects. High inflation and tighter monetary conditions will further weigh on momentum. Extreme weather events, an intensification of the war in Ukraine, and instability in Argentina and Brazil are key risks. FocusEconomics panelists foresee the economy expanding 0.9% in 2022, which is unchanged from last month’s estimate, and 4.2% in 2023.

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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