Paraguay - Market OverviewParaguay - Market Overview
- Despite a slowdown in the first quarter of 2019, throughout the last decade, Paraguay has been one of the fastest growing economies in Latin America. Over the last fifteen years, the country has averaged four percent growth, handily outpacing much larger countries in the region. From 2008 to 2012, the country expanded at an average rate of 0.93 percent quarterly, mostly due to a rise in exports of agricultural commodities. Shipments of soy, cereals and meat account for more than 65 percent of total exports and for almost a quarter of the output. Despite the growth, high poverty, inequality, and rampant corruption remain major challenges that the country has yet to overcome.
- Paraguay’s Central Bank revised its Gross Domestic Product (GDP) projection for 2019 to 3.2 percent, down from 4.0 percent.
Paraguay’s rapidly growing open economy (13.6 percent GDP growth in 2013, 4.2 percent in 2014, 3.5 percent in 2015, 4.0 percent in 2016, 4.8 percent in 2017, 3.6 percent for 2018 and a projection of 3.2 percent for 2019), has a strong demand for U.S. manufactured products and the potential for continued growth over the next decade.
- U.S.-Paraguay bilateral goods trade was $2.5 billion in 2018, with the United States enjoying a $2.2 billion surplus. U.S. exports of $2.4 billion included machinery, mineral fuels, toys, sports equipment, and optical and medical instruments. Imports from Paraguay, totaling $131 million, were primarily sugar, oil seeds, precious metal and stone, wood, and products of animal origin.
- FDI flows to Paraguay remain weak compared to flows towards its neighbors. The United States is the largest owner of FDI stock in Paraguay, followed by Brazil, Spain, Argentina and the Netherlands. FDI in the country is currently estimated at $6.03 billion (Central Bank of Paraguay). Foreign exchange reserves for April 2019 are $8.2 billion. The country’s debt-to-GDP ratio is 20.2 percent. Inflation was 3.2 percent in 2018.
- The service sector, including restaurants and hotels, transportation, financing, and retail, account for 48.5 percent of GDP. Agriculture, forestry, fishing, mining and cattle ranching create 10.5 percent of the wealth, with industry constituting another 19 percent. Construction, water and electricity account for 14 percent of GDP.
- Agriculture commodities exports account for roughly 46.5 percent of $9 billion in exports in 2018. Paraguay is the world’s largest exporter of organic sugar, second-largest producer and exporter of stevia, sixth-largest soy producer, and eighth-largest beef exporter by volume.
- large pool of young workers—half of Paraguay’s population is 25 or under and 30 percent is 15 or under–is an untapped resource and favors labor-intensive industry sectors.
Paraguay Trade Development and Promotion