Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 4/30/2019
In the last decade, Paraguay has been one of the fastest growing economies in Latin America.  Over the last five 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.

The Gross Domestic Product (GDP) in Paraguay contracted one percent in the first quarter of 2018 over the previous quarter.

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, and a projection of 4.5 percent for 2018), 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 $2.8 billion in 2017, with the United States enjoying a $2.6 billion surplus.  U.S. exports of $2.7 billion included machinery, mineral fuels, toys, sports equipment, and optical and medical instruments.  Imports from Paraguay, totaling $125 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 $5.1 billion (Central Bank of Paraguay).  Foreign exchange reserves for March 2018 are $7.95 billion.  The country’s debt-to-GDP ratio is 24.1 percent.  Inflation was 4.5 percent in 2017.

The service sector, including restaurants and hotels, transportation, financing, and retail, account for 49 percent of GDP.  Agriculture, forestry, fishing and cattle ranching create 20 percent of the wealth, with industry and mining constituting another 12 percent.  Construction and water and gas distribution account for 10 percent of GDP.

Agriculture commodities dominate Paraguay’s exports, accounting for roughly 77 percent of $11.2 billion in exports in 2016.  Paraguay is the world’s largest exporter of organic sugar, second-largest producer and exporter of stevia, sixth-largest soy producer, and seventh-largest beef exporter.

Paraguay’s 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.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Paraguay Trade Development and Promotion