- Basic data
- Public finances and the state budget
- Banking system
- Tax System
According to cheeroutdoor.com, Paraguay has shown stable growth in recent years, however, it remains a developing country that has to rely on agricultural products and related problems (price fluctuations on world markets, dependence on the weather). The government is trying to diversify the economy, which it is partially succeeding in, mainly thanks to private investment in industry and government spending on infrastructure projects. The share of industry and services in GDP is gradually increasing.
As a result of the coronavirus pandemic, GDP fell by around 3% in 2020, which was still the best result on the entire continent. A 3% growth is expected for 2022. Unemployment has been at a relatively low number for a long time. Paraguay has maintained a low inflation level for a long time, but year-on-year inflation at the beginning of 2022 approached 10% after many years. So-called undeclared work remains a big problem in Paraguay. It is estimated that up to 34% of employees are not officially registered with the relevant authorities.
|GDP growth (%)||-0.4||-0.8||4.5||4||3.6|
|Export of goods (billion USD)||12.7||11.5||13.7||15.5||15.5|
|Import of goods (billion USD)||12.3||10||11.9||13.1||13.8|
|Trade Balance (Billion USD)||0.2||1.2||1.6||2.1||1.5|
|Industrial production (% change)||0.2||ON||ON||ON||ON|
|OECD export risk||05.VII||05.VII||05.VII||ON||ON|
Source: EIU, OECD, IMD
Public finance and state budget
|State budget balance (% of GDP)||-3.7|
|Public debt (% of GDP)||33|
|Current account balance (billion USD)||1.1|
|VAT||5% and 10%|
Paraguayan public finances are characterized by considerable budgetary prudence, which is reflected in small deficits. Paraguay’s debt was still considered sustainable in 2019 given that it did not represent more than 20% of its GDP. Under standard conditions, the government has a limited deficit of the state budget at the level of 1.5% of GDP, which cannot be exceeded. Due to the Covid-19 pandemic, debt increased in a few months and ended 2020 at 33% of GDP. Paraguay is still one of the least indebted countries in the world.
The largest banks in Paraguay by amount of bank assets
Banco GNB Paraguay
Banco Do Brasil
Banco De La Nacion Argentina
Banco Itau Paraguay
Paraguay has the lowest tax burden among Mercosur countries. A tax of 10% is applied to the profits of companies and the income of natural persons. The VAT rate is the same (5% VAT is applied to selected items).
Foreign companies can use the so-called maquilas system, which is a tool to support domestic employment. It taxes the added value on work ordered by a foreign company from a domestic company in Paraguay at a rate of 1%. The condition is the export of the product created in this way.
In 2020, a tax reform came into force that reduces the effective tax burden on foreign companies from 27.3% to 23.5%.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
911 – Police
131, 132 – firefighters
141 – medical emergency
Important web links and contacts
Office of the President of the Republic – https://www.presidencia.gov.py
Central Bank of Paraguay – https://www.bcp.gov.py
Statistics Office – http://www.dgeec.gov.py
Rediex – http://www.rediex.gov.py/
Journals and web servers
El País – https://elpais.com/tag/paraguay/a
ABC – http://www.abc.com.py
Última Hora – https://www.ultimahora.com
Paraguay – http://www.paraguay.com