The recent depreciation of the dollar against the guarani is tightening the Paraguayan government's fiscal space and exposing the state's financial fragility, according to economist Arnold Benítez. In an interview, he explained that the 2026 General Budget of the Nation (PGN) was built on assumptions of growth, inflation, exchange rate, and revenue level. “If one of these assumptions changes a lot, as is happening with the dollar, it creates pressure on the fiscal margin,” he said.
Benítez highlighted that the fall of the US currency directly affects government revenue, especially customs Value Added Tax (IVA) and taxes on imports. “When the dollar drops sharply, the state collects fewer guaranis from operations linked to foreign trade,” he said. He warned that the problem is not just the exchange rate, but the government's reaction: “If it compensates with delays to suppliers, more floating debt, or pressure on the formal taxpayer, then we enter a delicate zone.”
The economist criticized the delays in payments to state suppliers, which generate a “chain” of difficulties for the private sector. “A company that has already delivered goods, services, or works and does not get paid on time starts to have cash flow problems, working capital issues, and trouble paying banks, suppliers, and employees,” he explained. Moreover, this makes the state itself more expensive: “If suppliers know they will be paid late, they incorporate that risk into prices. In the end, the state pays more, and the economy becomes less efficient.”
For Benítez, the government needs a clear regularization schedule, prioritize overdue payments, and use instruments such as factoring and negotiable certificates to order the debt with suppliers. He also argued that meeting the fiscal deficit target by leaving bills unpaid “is not fiscal discipline; it is pushing the problem forward.”
Regarding the competitiveness of exporters, Benítez said it cannot depend solely on the exchange rate. “It has to come from better infrastructure, logistics, competitive energy, less bureaucracy, financing, legal certainty, and market opening,” he said. He concluded that the government needs to “pay better, spend better, and communicate better,” while the private sector should professionalize exchange rate risk management.