ASUNCIÓN — The Paraguayan economy is projected to show strong growth in 2025, exceeding initial expectations. On September 6, during the submission of the 2026 National Budget to Congress, Minister of Economy and Finance (MEF) Carlos Fernández Valdovinos announced that the country's Gross Domestic Product (GDP) growth rate is expected to approach 5%. This figure is higher than the current forecast from the Central Bank of Paraguay (BCP).

Economic Vitality Exceeds Expectations 

In July, based on economic performance in the first half of the year, the Central Bank had already raised its GDP growth forecast from 4% to 4.4%. However, Minister Fernández stressed that the MEF's own analysis suggests the actual growth rate will be significantly higher than the Central Bank's prediction. "According to the Central Bank's short-term economic activity indicators, the Paraguayan economy has maintained a growth rate exceeding 4% for more than two years," he explained. "Notably, the GDP for the first quarter of 2025 recorded a high growth rate of nearly 6%," a figure much higher than the Central Bank's current annual forecast.

The Minister pointed to robust productivity in the agricultural and livestock sectors, along with the revitalization of the domestic market—including construction and services—as key drivers of this growth. He noted that the government's increased infrastructure investments and a rise in private consumption have positively impacted economic activity. The Paraguayan Industrial Union (UIP) also supported these positive signals in a recent report, stating that productivity across major industrial sectors has been steadily improving and the job market is showing signs of recovery.

Positive External Environment and Optimistic Outlook 

The Paraguayan economy has traditionally relied heavily on the export of agricultural products like soybeans and beef. Recently, stable international grain prices and increased demand from major export markets such as China and Europe have contributed to strong export performance. Additionally, the economic recovery of neighboring countries Brazil and Argentina has helped improve Paraguay's trade environment.

Considering these positive domestic and international factors, Minister Fernández expressed his confidence that the 2025 year-end economic growth rate will be much closer to 5% than the Central Bank's 4.4% forecast. This announcement is expected to boost investor confidence in the Paraguayan economy and positively influence the government's fiscal management. All eyes are now on whether the Central Bank will once again adjust its growth forecast to align with the Ministry of Economy's optimistic outlook.

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