MercoPress. South Atlantic News Agency

Paraguayan President highlights economic growth and 3.1% inflation

Peña acknowledged his country faced “tensions” inherent to a developing economy

The Central Bank of Paraguay (BCP) announced on Tuesday that the country has concluded 2025 with an annual inflation rate of 3.1%, successfully meeting its target range and demonstrating a trend of continued macroeconomic stability.

The year-end figure was lower than the 3.8% recorded in 2024 and fell below the BCP’s initial estimate of 3.6%. In this scenario, President Santiago Peña described 2025 as a “unique” year for the nation, highlighting a projected GDP growth of over 6%.

The final month of the year saw a monthly deflation of -0.3%, driven largely by a drop in volatile costs, with significant price reductions in fuels (-4.0%), vegetables and tubers (-12.6%), dairy, eggs, and pasta. Conversely, the holiday season and service demands led to price hikes in tourism, internet services, and hairdressing.

While December saw only a slight monthly increase in beef (0.3%), the cumulative annual increase for meat products reached 12.6%, creating a “cost of living” tension for the average consumer.

The new figures marked the third consecutive year of growth above 4%, a streak the President noted has not occurred since the 2006–2008 period.

Key pillars of the 2025 economic success included nearly US$2 billion in investments in health, education, and security, many stemming from successful negotiations with Brazil.

Additionally, Asunción's Silvio Pettirossi International Airport surpassed pre-pandemic traffic levels, fueled by record tourism and a rise in foreign residents settling in Paraguay.

Despite the positive indicators, President Peña acknowledged the “tensions” inherent in a developing economy. He specifically addressed the rise in the food basket, noting that while high beef prices (up roughly 7% to 12% depending on the index) benefit the livestock and industrial sectors, they present a significant challenge for the middle class and general consumers.

“This is the great challenge in terms of public policy,” Peña stated, “balancing the benefits for our productive sectors with the impact on the consumer's pocket.”