Paraguay Economy - 2022

GEOGRAPHICAL NAMES 

Economic overview

Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain.

 

On a per capita basis, real income has grown steadily over the past five years as strong world demand for commodities, combined with high prices and favorable weather, supported Paraguay's commodity-based export expansion. Paraguay is the fifth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. Severe drought and outbreaks of hoof-and-mouth disease in 2012 led to a brief drop in beef and other agricultural exports. Since 2014, however, Paraguay’s economy has grown at a 4% average annual rate due to strong production and high global prices, at a time when other countries in the region have contracted.

 

The Paraguayan Government recognizes the need to diversify its economy and has taken steps in recent years to do so. In addition to looking for new commodity markets in the Middle East and Europe, Paraguayan officials have promoted the country’s low labor costs, cheap energy from its massive Itaipu Hydroelectric Dam, and single-digit tax rate on foreign firms. As a result, the number of factories operating in the country – mostly transplants from Brazil - has tripled since 2014.

 

Corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth. Judicial corruption is endemic and is seen as the greatest barrier to attracting more foreign investment. Paraguay has been adverse to public debt throughout its history, but has recently sought to finance infrastructure improvements to attract foreign investment.

Real GDP (purchasing power parity)

$87.98 billion (2020 est.)

$88.87 billion (2019 est.)

$89.23 billion (2018 est.)

note: data are in 2017 dollars

Real GDP growth rate

4.8% (2017 est.)

4.3% (2016 est.)

3.1% (2015 est.)

Real GDP per capita

$12,300 (2020 est.)

$12,600 (2019 est.)

$12,800 (2018 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$38.94 billion (2017 est.)

Inflation rate (consumer prices)

3.6% (2017 est.)

4.1% (2016 est.)

Credit ratings

Fitch rating: BB+ (2018)

Moody's rating: Ba1 (2015)

Standard & Poors rating: BB (2014)

note: The year refers to the year in which the current credit rating was first obtained.

GDP - composition, by sector of origin

agriculture: 17.9% (2017 est.)

industry: 27.7% (2017 est.)

services: 54.5% (2017 est.)

GDP - composition, by end use

household consumption: 66.7% (2017 est.)

government consumption: 11.3% (2017 est.)

investment in fixed capital: 17.3% (2017 est.)

investment in inventories: 0.3% (2017 est.)

exports of goods and services: 46.6% (2017 est.)

imports of goods and services: -42.2% (2017 est.)

Agricultural products

soybeans, sugar cane, maize, cassava, wheat, rice, beef, milk, oranges, oil palm fruit

Industries

sugar processing, cement, textiles, beverages, wood products, steel, base metals, electric power

Industrial production growth rate

2% (2017 est.)

Labor force

3.428 million (2017 est.)

Labor force - by occupation

agriculture: 26.5%

industry: 18.5%

services: 55% (2008)

Unemployment rate

5.7% (2017 est.)

6% (2016 est.)

Youth unemployment rate (ages 15-24)

total: 16.1%

male: 12.2%

female: 22.1% (2021 est.)

Population below poverty line

23.5% (2019 est.)

Gini Index coefficient - distribution of family income

46.2 (2018 est.)

53.2 (2009)

Household income or consumption by percentage share

lowest 10%: 1.5%

highest 10%: 37.6% (2013 est.)

Budget

revenues: 5.524 billion (2017 est.)

expenditures: 5.968 billion (2017 est.)

Budget surplus (+) or deficit (-)

-1.1% (of GDP) (2017 est.)

Public debt

19.5% of GDP (2017 est.)

18.9% of GDP (2016 est.)

Taxes and other revenues

14.2% (of GDP) (2017 est.)

Fiscal year

calendar year

Current account balance

-$298 million (2017 est.)

$416 million (2016 est.)

Exports

$11.81 billion (2020 est.) note: data are in current year dollars

$13.27 billion (2019 est.) note: data are in current year dollars

$14.36 billion (2018 est.) note: data are in current year dollars

Exports - partners

Brazil 32%, Argentina 22%, Chile 8%, Russia 8% (2019)

Exports - commodities

soybeans and soybean products, electricity, beef, corn, insulated wiring (2019)

Imports

$10.62 billion (2020 est.) note: data are in current year dollars

$13.15 billion (2019 est.) note: data are in current year dollars

$13.88 billion (2018 est.) note: data are in current year dollars

Imports - partners

Brazil 24%, United States 22%, China 17%, Argentina 10%, Chile 5% (2019)

Imports - commodities

broadcasting equipment, cars, pesticides, refined petroleum, tires (2019)

Reserves of foreign exchange and gold

$7.877 billion (31 December 2017 est.)

$6.881 billion (31 December 2016 est.)

Debt - external

$16.622 billion (2019 est.)

$16.238 billion (2018 est.)

Exchange rates

guarani (PYG) per US dollar -

7,045 (2020 est.)

6,426 (2019 est.)

5,915.4 (2018 est.)

5,160.4 (2014 est.)

4,462.2 (2013 est.)

NOTE: The information regarding Paraguay on this page is re-published from the 2022 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Paraguay 2022 information contained here. All suggestions for corrections of any errors about Paraguay 2022 should be addressed to the CIA or the source cited on each page.