Paraguay faces an economic contradiction: buying an SUV pickup today requires fewer guaranis than a few years ago, but the price of essential items like milk, soap, and oil continues to rise. This observation comes from economist Jorge Garicoche, who points to the phenomenon as a result of “imported inflation” from neighboring countries.
According to Garicoche, the stability of the guarani against the dollar is not reflected on supermarket shelves. The country heavily depends on production from Argentina, Brazil, and Chile to supply food and hygiene products. “We are not just importing products; we are importing inflation,” he states.
Although Argentina has reduced its inflation peaks from nearly 200% to around 30%, this level still directly impacts the replacement cost of items entering Paraguay. Additionally, high fuel prices raise the entire logistics chain, canceling out any benefit that a potential drop in international prices could bring to the final consumer.
Garicoche summarizes the disconnect between macroeconomic indicators and everyday reality with the phrase: “You can't eat that.” For most families, the priority is not the automotive or technology market, but everyday consumer goods. The lack of more aggressive competition in the local market also prevents any improvements in costs from quickly reaching the final price.
The main challenge in the coming months, according to the economist, will be to see whether the slowdown in inflation in neighboring countries and a potential stabilization of fuel prices will allow macroeconomic relief to finally reach Paraguayans' tables. For now, the dilemma persists: Paraguay may be more affordable for buying certain assets, but it remains expensive and challenging when filling the supermarket cart.