MercoPress. South Atlantic News Agency

Paraguay’s long-run growth leads South America, but income gains lag

The same comparisons place larger economies behind Paraguay in percentage terms, including Colombia, Chile and Brazil

From 1960 to 2024, Paraguay posted the highest cumulative GDP expansion in South America, according to calculations published by Forbes Paraguay and Colombia’s La República, drawing on World Bank constant-2015-dollar series. Over that span, Paraguay’s economy rose from roughly US$2.8 billion to about US$46 billion (2015 prices), multiplying more than sixteen-fold.

The same comparisons place larger economies behind Paraguay in percentage terms, including Colombia, Chile and Brazil. The gap is wider versus Argentina and Venezuela, which the cited comparisons describe as far more volatile over the period.

Economists typically add caveats: percentage leadership over six decades also reflects starting from a small base, and aggregate GDP does not capture living standards. In 2024, Paraguay’s GDP per capita (current dollars) remained well below Uruguay and other higher-income peers in the region, according to World Bank figures.

Still, Paraguay’s post-2000s trajectory stands out for steadier macro management. An IMF “Selected Issues” paper links the growth pickup to a rebound after late-1990s turmoil, a favorable external backdrop and policy improvements. President Santiago Peña argued the economy could hold above 4% growth even amid weaker soy prices, pointing to investment and export-logistics support.

Forward-looking indicators also suggest moderation rather than reversal: Paraguay’s central bank forecast 4.2% growth in 2026. At the same time, S&P raised Paraguay to investment grade in late 2025, citing stability and fiscal discipline, according to The Wall Street Journal and S&P Global.

The policy question now is conversion: turning long-run expansion into higher productivity, better wages and a more complex export basket—beyond soy and beef—while leveraging cheap power from Itaipu Dam and tightening institutions that curb informality and corruption.