Paraguay Economic Outlook
Agricultural powerhouse:
Paraguay is a major agricultural exporter, particularly of soybeans and beef, which drive much of its economic activity. Its agricultural success has been supported by vast arable land, a favorable climate, and trade agreements, particularly with Mercosur partners. Paraguay’s agricultural sector benefits from modern farming techniques and strong demand from China and Brazil. However, the country remains vulnerable to climate-related disruptions, such as droughts, which can significantly impact production and export revenues.
Stable macroeconomic environment:Unlike some regional peers, Paraguay has maintained relatively low inflation and stable public finances. The country has one of the lowest debt-to-GDP ratios in South America, providing room for public investment. Paraguay’s fiscal discipline and prudent economic management have allowed it to weather external shocks better than some neighboring countries. However, the financial sector remains underdeveloped, limiting access to credit for businesses and consumers. Strengthening the banking system and improving financial inclusion will be key to supporting long-term growth.
Challenges:Despite macroeconomic stability, Paraguay struggles with high levels of informality, weak infrastructure, and institutional weaknesses. Corruption and limited industrial development hinder economic diversification. Additionally, social inequality remains a concern, with significant disparities in income and access to basic services. While the country has made progress in expanding access to education, more investment is needed to improve the quality of the workforce and enhance productivity.
Paraguay’s economic outlook:Paraguay’s economy is expected to see growth above the Latin American average, driven by agriculture, hydropower exports, and infrastructure development. Strengthening institutions and investing in education and industry will be key for sustaining long-term economic growth. The government aims to attract foreign direct investment in sectors such as manufacturing and technology, which could help reduce reliance on agriculture.
Paraguay's Macroeconomic Analysis:
Nominal GDP of USD 43.0 billion in 2023.
Nominal GDP of USD 44.5 billion in 2024.
Nominal GDP of USD 44.5 billion in 2024.
GDP per capita of USD 6,456 compared to the global average of USD 10,589.
GDP per capita of USD 5,807 compared to the global average of USD 10,589.
GDP per capita of USD 5,696 compared to the global average of USD 10,589.
Average real GDP growth of 3.3% over the last decade.
Average real GDP growth of 3% over the last decade.
Average real GDP growth of 3% over the last decade.
Sector Analysis
In 2022, services accounted for 49.0% of overall GDP, manufacturing 19.4%, other industrial activity 20.3%, and agriculture 11.3%. Looking at GDP by expenditure, private consumption accounted for 66.3% of GDP in 2023, government consumption 12.0%, fixed investment 19.6%, and net exports 2.1%.International trade
In 2023, manufactured products made up 13.7% of total merchandise exports, mineral fuels 13.2%, food 70.4%, ores and metals 1.1% and agricultural raw materials 1.4%, with other categories accounting for 0.2% of the total. In the same period, manufactured products made up 77.2% of total merchandise imports, mineral fuels 13.1%, food 7.5%, ores and metals 1.3% and agricultural raw materials 1.0%, with other goods accounting for -0.1% of the total. Total exports were worth USD 14.70 billion in 2024, while total imports were USD 15.80 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.3% in the decade to 2023. To read more about GDP growth in Paraguay, go to our dedicated page.
Fiscal policy
Paraguay's fiscal deficit averaged 2.4% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 6.3% in the decade to 2023. For more information on Paraguay's unemployment click here.
Inflation
Inflation averaged 4.3% in the decade to 2024. Go to our Paraguay inflation page for extra insight.
Monetary Policy
Paraguay's monetary policy rate ended 2024 at 6.00%, down from 6.75% a decade earlier. See our Paraguay monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the guarani weakened by 40.4% vs the U.S. dollar. For more info on the guarani, click here.
Economic situation in Paraguay
Our panel forecasts year-on-year GDP growth to have decelerated from Q4 2024 in Q1 while remaining strong by Latin American standards. Higher inflation and unemployment likely hampered private consumption. That said, available data suggests upside risks to this forecast: Growth of economic activity rose and merchandise exports fell less sharply in Q1 vs Q4, the latter likely buttressed by stronger momentum in top trading partner Argentina; moreover, remittances boomed by over 30%, possibly boosted by fear of hostile U.S. deportation policy. Turning to Q2, the economy should be expanding at a solid pace, bolstered by the government’s infrastructure plans—including a USD 4 billion pulp mill and a USD 1.2 billion green hydrogen and ammonia plant—and continued efforts to foster investment in the private sector and support productivity. Still, economic activity growth eased from Q1 in April.Paraguay Economic Forecasts
Projections out to 2034.46 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 14 expert analysts.
Want to get insight on the economic outlook for Paraguay in the coming years? FocusEconomics collects projections out to 2034 on 46 economic indicators for Paraguay from a panel of 14 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Paraguay economy. To download a sample report on the Paraguay's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.