MercoPress. South Atlantic News Agency

Paraguay's economy projected to grow this year above expectations

Paraguay's economy “is growing due to non-traditional sectors,” Carvallo said

Paraguay's Central Bank (BCP) significantly revised its economic forecast this week, estimating that the country's Gross Domestic Product (GDP) will expand by 6% by the end of 2025, a sharp increase from the initial 3.8% projection.

 “All high-frequency, short-term, and general indicators lead us to estimate that the economy will close the year with 6% growth,” stated BCP President Carlos Carvallo upon launching the latest report on Friday.

“We underestimated the capacity of the Paraguayan economy,” Carvallo acknowledged during the “Paraguay: 2025 Assessment and 2026 Outlook” conference.

The projected 6% growth is nearly triple the average estimates for the rest of the region and is above the 4.7% growth achieved in 2024. Carvallo emphasized that this expansion is characterized by being “virtuous, balanced, and distributed.”

As per the BCP's assessment, growth is exceeding 5% across all three major sectors, with industry and services now driving progress more than agriculture and binational entities.

The sustained performance, despite an “adverse, volatile, and uncertain” global context, is attributed to a structural transformation that allows the economy to “grow on its own.”

This growth has translated directly into job creation, with 146,000 new posts generated this year. Carvallo highlighted that the 2025 performance, combined with estimates for 2026, would give Paraguay an unprecedented streak of four consecutive years with growth above 4%.

Regarding inflation, the BCP reported success in maintaining price stability, keeping inflation within the target range all year. The projection for the end of 2025 is 3.6%, nearing the 3.5% target.

Looking ahead to 2026, the BCP forecasts solid, though moderately slower, growth of 4.2%, driven by continued strong domestic investment and industrial expansion. Inflation is expected to stabilize at the target of 3.5%.