MercoPress. South Atlantic News Agency

Significant drop in Paraguayan unemployment reported

It was the lowest unemployment rate for a first quarter since measuring began in 2017

Paraguay has recorded significant improvements in its labor market, with formal employment rising and unemployment hitting its lowest level for a first quarter since 2017. The employed population grew to 2.91 million people in the first quarter of 2025, marking an increase from 2.87 million in the same period of 2024. The unemployment rate fell to 5.6%, down from 6.9% in early 2024, with 41,106 individuals moving out of joblessness.

In the private sector, the number of workers rose from 1.2 million to 1.24 million, particularly in the primary sector (agriculture, livestock, hunting and fishing) with 13,392 more workers, in the secondary sector (construction) with nearly 15,000 more employed, and in the tertiary sector (services) with 29,301 more, specifically in transport, storage, communications, finance, insurance, real estate, electricity, gas, and water. In addition, the number of employed women went up by 34,257 compared to the previous year.

Paraguay's labor market also showed an increase in formal employment, granting more workers social security benefits. However, labor informality remained high, affecting nearly 62% of the population, according to the National Statistics Institute (INE).

In Paraguay, informal workers do not contribute to the retirement and pension system, while self-employed individuals are not registered in the Single Taxpayers Registry.

In urban areas, informality decreased slightly, indicating some improvement, but still impacts over half of non-agricultural workers. Meanwhile, previous declines were reversed in rural areas absent structural policies focused on incentivizing formalization through fiscal, labor, and financial inclusion measures that may have a transformative impact. Informality had dropped in early 2024 but bounced back later in the year.

According to the INE's Permanent Continuous Household Survey, there was a slight drop in the first quarter of 2025, when the country had 1,510,471 workers in the informal sector, which represented a reduction of 8,559 people compared to the first quarter of 2024, when 1,519,029 employees were counted. In addition, the number of workers in rural areas seems to be on the rise from 464,461 in Q1 of 2024 to 480,002 in Q1 of 2025.