Asunción, Paraguay – Paraguay's investment landscape has experienced a significant boost in the first four months of 2025, primarily fueled by the nation's proactive investment promotion policies. A recent report from the Ministry of Industry and Commerce reveals that a total of 11 new projects, amounting to a substantial $179 million USD, were approved under the Investment Promotion Law (Law 60/90) during this period. Notably, the month of April alone witnessed an inflow of $11 million USD in investments.

The report highlights a remarkable 24% increase in investment under the incentive policy compared to the same period last year, signaling a robust growth trajectory. The number of new projects approved last month reached 57, marking a 21% increase year-on-year. An analysis of the cumulative projects by industry reveals a dominant share held by the secondary sector, primarily manufacturing, accounting for 91% of the total investment. The tertiary sector followed with 6%, while the primary sector attracted 3%.

A striking trend within the investment figures is the significant growth in domestic investment. By the end of April this year, domestic investment reached $139 million USD, an impressive surge of 102% compared to the corresponding period in 2024. In contrast, foreign direct investment (FDI) amounted to $42 million USD during the same timeframe.

This surge in investment is translating into positive outcomes for employment. The report indicates that 2,481 new jobs were created in the first four months of 2025 as a direct result of these investment projects. This represents a substantial 192% increase compared to the 850 jobs created in the same period last year. The textile and apparel sector emerged as the leading job creator with 978 new positions, followed by the food industry with 698 jobs and the metal and metal products manufacturing sector with 372 new employees.

Law 60/90, widely known as the "Tax Exemption for Capital Investment" law, serves as a cornerstone of Paraguay's strategy to attract both domestic and foreign capital. This legislation offers a range of incentives, including tax breaks, to companies undertaking new investments or expanding existing operations. The significant increase in investment during the first quarter of 2025 is largely attributed to the effectiveness of this policy. The Paraguayan government aims to bolster the competitiveness of its domestic industries and drive sustained economic growth through this proactive approach.

Experts anticipate that if this positive investment momentum continues into the second half of the year, it will provide a significant boost to Paraguay's overall economic growth. The strong performance of the manufacturing sector, in particular, is expected to stimulate growth in related industries and inject vitality into the labor market.

However, some analysts have voiced concerns regarding the relatively lower inflow of foreign direct investment compared to the substantial growth in domestic investment. Amidst ongoing global economic uncertainties, there is a call for the government to intensify its efforts to attract stable and long-term foreign investment through diverse strategies.

Furthermore, to maximize the impact of the investment promotion policies, it is crucial to encourage investment across a wider range of sectors rather than concentrating solely on specific industries. Simultaneously, policy support aimed at creating high-quality jobs should be prioritized. The government has indicated its commitment to closely monitoring investment trends and strengthening necessary policy support moving forward.

The robust investment figures in the first quarter of 2025 underscore the potential of Paraguay's investment promotion strategies to stimulate economic activity and create employment opportunities. While the focus on domestic investment is yielding positive results, a balanced approach that actively seeks to attract foreign capital will be crucial for sustained and diversified economic development in the long term. The continued success of Law 60/90 and complementary policies will play a pivotal role in shaping Paraguay's economic future.

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