ASUNCIÓN, PARAGUAY – It has been revealed that 78% of new regular jobs registered with the Paraguayan Social Security Institute (IPS) were created in the service sector. Specifically, wholesale and retail trade accounted for an overwhelming 38.78% of new contributors within the service sector. Manufacturing comprised only 20% of the total, and the primary sector a mere 1%, once again confirming the service industry as the key driver of the Paraguayan employment market.
Service Sector Emerges as a Pillar of the Employment Market
According to data from the IPS and the Ministry of Labor, Employment, and Social Security (MTESS), a total of 65,550 new regular employees were registered with the IPS over a 20-month period, from July 2023 to March 2025. The majority of these are employed in the service sector. In detail, wholesale and retail trade accounted for the highest proportion at 38.78%. This was followed by services for public and commercial enterprises at 29.05%, and general services (including hotels, bars, and restaurants) at 11.13%, demonstrating the employment generation capacity across the service sector.
Currently, IPS administrative records show that as of March 2025, the total number of regular employees is 764,145. This is a positive sign indicating a steady increase in regular employment within the Paraguayan economy.
Dynamic Changes in Wholesale and Retail Trade
According to employment expert Enrique López Arce, the number of people employed in wholesale and retail trade increased from 853,000 at the beginning of 2024 to 903,000 by year-end. However, it decreased again to 832,000 in the first quarter of 2025. This is analyzed as a result of significant seasonal factors, where employment temporarily increases at year-end.
López Arce emphasized that "those who left their jobs likely worked in small, informal businesses," pointing out the instability of the informal market. This suggests that the Paraguayan government needs to implement policy efforts to encourage formal employment and reduce the informal sector.
Cross-Border Trade Revitalization Boosts Service Sector Employment
The increase in services for public and commercial enterprises (29.05%), which holds the second-highest proportion within the service sector, is closely related to the recovery of cross-border trade. López Arce explained, "This is related to the recovery of service providers accompanying the revitalization of border commerce, as Argentines flock to Encarnación, Asunción, as well as Pilar and Alberdi for shopping."
As the Argentine economy recovers, cross-border trade between the two countries is becoming more active, positively impacting commercial activities in Paraguayan border cities. This has led to an increase in demand for related services such as cleaning, maintenance, and legal services, as well as customer service (often outsourced) required by 24-hour commercial establishments like mini-supermarkets, banks, and call centers, thus boosting employment in these areas.
Growth in Tourism and Hospitality Sectors
The third-largest proportion of new contributors, general services (including hotels, bars, and restaurants), recorded 11.13%. This is primarily analyzed as a benefit from the recovery of the Argentine economy. In the past, prices in Argentina were often cheaper, leading many Paraguayans to shop there. Recently, however, economic conditions have reversed, with Argentine tourists increasingly visiting hotels and restaurants in Paraguay.
This phenomenon is significantly revitalizing Paraguay's tourism and hospitality sectors and greatly contributing to employment growth in related fields. Particularly, with higher inflation in Argentina leading to increased relative price competitiveness in Paraguay, a greater influx of short-distance travelers is expected. This is anticipated to have a positive impact on the overall growth of Paraguay's tourism industry and foreign currency inflow.
Challenges and Prospects for the Paraguayan Employment Market
This IPS data clearly demonstrates the increasing importance of the service sector in the Paraguayan economy. While the relatively low proportion of manufacturing and the primary sector indicates an imbalance in the industrial structure, the growth of the service sector can positively influence domestic demand and the development of the tourism industry.
However, challenges also exist. Employment volatility due to seasonal factors and the size of the informal sector are still pointed out as vulnerabilities in the Paraguayan employment market. The government should continue to support the sustainable growth of the service sector while simultaneously strengthening the competitiveness of manufacturing and the primary sector, and implementing policies to encourage the transition of informal workers to regular employment. Furthermore, efforts to expand infrastructure and improve service quality for attracting tourists must continue.
While Paraguay's employment indicators for the first quarter of 2025 generally show a positive trend, efforts for balanced industrial development and a stable employment environment need to continue in the long term.
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