Paraguay Economy Facts
Poor Paraguay is intrusive between its wealthier neighbors Brazil and Argentina. The “black” economy is believed to be larger than the official, legal. Corruption and poor border control have made Paraguay a smuggler’s paradise.
The official economy is based on agriculture, where soy and meat production dominates. Forestry is important, as is the production of hydropower (see Natural Resources, Energy and the Environment). Paraguay is one of the world’s largest exporters of electricity, accounting for about a quarter of its sales abroad. Export earnings are dependent on world market prices and weather fluctuations.
- Countryaah.com: Major imports by Paraguay, covering a full list of top products imported by the country and trade value for each product category.
A large part of the industrial goods used are imported. There is also a well-established commercial sector that imports consumer goods from the United States as well as Japan and other Asian countries, and re-exports to neighboring countries. In addition, goods of all kinds are illegally imported from neighboring countries and resold within the country or shipped to other countries. Improved road connections to Brazil have contributed to a significant increase in smuggling operations.
Black stock trading is estimated to account for more than half of all economic activity, and the military’s involvement in smuggling has made it difficult for the authorities to access it. Drugs, luxury goods (both genuine and counterfeit branded goods) and weapons – everything can be bought in the border town of Ciudad del Este. Coffee and soy are smuggled in from Brazil and then exported. Cannabis is grown in Paraguay and sold on the international drug market. Cocaine from Bolivia is transported through the country on its way to the US and Europe.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including PRY which represents the country of Paraguay. Check findjobdescriptions to learn more about Paraguay.
Paraguay differs in many ways from other countries in the region, including the size of the informal sector. The agricultural sector is also unusually large and its share of gross domestic product (GDP) has also increased in recent decades. Although Stroessner’s regime in the 1970s and 1980s attracted large foreign loans with poor conditions, the country has also succeeded without settling payments or requesting debt restructuring.
After the fall of the dictatorship in 1989, economic reforms were carried out: exchange rates were released, newly launched foreign projects were given five years of tax exemption and export duties were abolished. But the sale of state-owned companies has been slow. One reason for this is that the ruling Colorado Party has used its control over the state sector to secure the votes of public servants in the elections. The reduction in the number of public employees required by the International Monetary Fund (IMF) for the restoration of state finances has therefore been slow.
The economy grew during the 1990s, but the slowdown in the world economy led to a economic downturn at the turn of the millennium for a couple of years. Since then, growth has generally been high, although the global financial crisis hit Paraguay and the economy shrank in 2009. Not least the agricultural sector has performed well, despite an economic downturn in the most important trading partners Brazil and Argentina.
Paraguay has difficulty attracting foreign investment, as it is a poor and politically unstable country with a low educated population, extensive corruption and high crime rates.
FACTS – FINANCE
GDP per person
US $ 5,871 (2018)
US $ 40,842 million (2018)
3.6 percent (2018)
Agriculture’s share of GDP
10.5 percent (2018)
Manufacturing industry’s share of GDP
19.5 percent (2018)
The service sector’s share of GDP
48.4 percent (2018)
3.5 percent (2019)
Government debt’s share of GDP
21.5 percent (2018)
US $ 16,063 million (2017)
US $ 13,273 million (2018)
US $ 12,606 million (2018)
US $ 220 million (2018)
Commodity trade’s share of GDP
55 percent (2018)
Main export goods
electricity, soybeans and soy products, meat, cereals (2016)
Largest trading partner
Brazil, China, Argentina (2016)
The Colorado Party wins in local elections
The Colorado Party has great successes in municipal elections. The party wins in most provincial capitals and over half of all municipalities.
Military commanders are replaced again
The President replaces the heads of the various branches of the defense. This is the fourth time in the term of office that this is happening.
State of emergency announced
President Lugo announces a 30-day state of emergency in five provinces where the left-wing guerrilla EPP is accused of murder and kidnapping.
Support alliance for Lugo is growing
Another new political organization is formed: the Guasú Front (Frente Guasú), an alliance of political organizations and social movements that supports President Lugo. The President’s former support alliance APC is included, and soon also the April 20 movement that was formed in Janauri.
New party will support Lugo
President Lugo’s Chief of Staff forms a new party, the April 20 Movement (Movimiento 20 de Abril). The party is supposed to be a new support party for Lugo and gets its name after the date Lugo won the 2008 presidential election.