Overview: Agriculture, including forestry, accounts for about 25% of GDP, employs about 45% of the labor force, and provides the bulk of exports, led by soybeans and cotton. Paraguay lacks substantial mineral or petroleum resources but possesses a large hydropower potential. Since 1981 economic performance has declined compared with the boom period of 1976-81, when real GDP grew at an average annual rate of nearly 11%. During the period 1982-86 real GDP fell in three of five years, inflation jumped to an annual rate of 32%, and foreign debt rose. Factors responsible for the erratic behavior of the economy were the completion of the Itaipu hydroelectric dam, bad weather for crops, and weak export prices for agricultural commodities. In 1987 the economy experienced a minor recovery because of improved weather conditions and stronger international prices for key agricultural exports. The recovery continued through 1990, on the strength of bumper crops in 1988-89. In a major step to increase its economic activity in the region, Paraguay in March 1991 joined the Southern Cone Common Market (MERCOSUR), which includes Brazil, Argentina, and Uruguay. In 1992, the government, through an unorthodox approach, reduced external debt with both commercial and official creditors by purchasing a sizable amount of the delinquent commercial debt in the secondary market at a substantial discount. The government had paid 100% of remaining official debt arrears to the US, Germany, France, and Spain. All commercial debt arrears have been rescheduled. For the long run, the government must press forward with general, market-oriented economic reforms. Growth of 3.5% in 1993 was spurred by higher-than-expected agricultural output and rising international commodity prices. Inflation picked up steam in fourth quarter 1993 because of rises in public sector salaries and utility rates.

National product: GDP - purchasing power equivalent - $15.2 billion (1993 est.)

National product real growth rate: 3.5% (1993 est.)

National product per capita: $3,000 (1993 est.)

Inflation rate (consumer prices): 20.4% (1993 )

Unemployment rate: 11% (1993 est.)

Budget:
revenues: $1.2 billion
expenditures: $1.4 billion, including capital expenditures of $487 million (1992 est.)

Exports: $728 million (f.o.b., 1993 est.)
commodities: cotton, soybean, timber, vegetable oils, meat products, coffee, tung oil
partners: EC 37%, Brazil 25%, Argentina 10%, Chile 6%, US 6%

Imports: $1.38 billion (c.i.f., 1993 est.)
commodities: capital goods, foodstuffs, consumer goods, raw materials, fuels
partners: Brazil 30%, EC 20%, US 18%, Argentina 8%, Japan 7%

External debt: $1.2 billion (1993 est.)

Industrial production: growth rate 2.2% (1991 est.); accounts for 20% of GDP

Electricity:
capacity: 5,257,000 kW
production: 16.2 billion kWh
consumption per capita: 3,280 kWh (1992)

Industries: meat packing, oilseed crushing, milling, brewing, textiles, other light consumer goods, cement, construction

Agriculture: accounts for 26% of GDP and 44% of labor force; cash crops - cotton, sugarcane, soybeans; other crops - corn, wheat, tobacco, cassava, fruits, vegetables; animal products - beef, pork, eggs, milk; surplus producer of timber; self-sufficient in most foods

Illicit drugs: illicit producer of cannabis for the international drug trade; important transshipment point for Bolivian cocaine headed for the US and Europe

Economic aid:
recipient: US commitments, including Ex-Im (FY70-89), $172 million; Western (non-US) countries, ODA and OOF bilateral commitments (1970-89), $1.1 billion

Currency: 1 guarani (G) = 100 centimos
Exchange rates: guaranies (G) per US$ - 1,861.3 (January 1994), 1,744.3 (1993), 1,500.3 (1992), 447.5 (March 1992), 1,325.2 (1991), 1,229.8 (1990), 1,056.2 (1989), 550.00 (fixed rate 1986-February 1989)

Fiscal year: calendar year

NOTE: The information regarding Paraguay on this page is re-published from the 1995 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Paraguay Economy 1995 information contained here. All suggestions for corrections of any errors about Paraguay Economy 1995 should be addressed to the CIA.