Economist Luis Rojas questions the contradiction between the official narrative highlighting Paraguay’s economic growth and the fiscal challenges acknowledged by the government, in an analysis published in Acción magazine.
Rojas states that Santiago Peña’s government maintains an economic model that benefits the political class and preserves privileges, without addressing the country’s deep social inequalities. “The country’s economy in 2025 was marked by continuity, by the preservation over time of structures, laws, and policies imposed on Paraguay by economic and political power groups over many years. It represents the continuation of unjust and exclusionary social structures inherited from violent historical processes,” he said.
Among the vulnerabilities identified are the state’s low revenue-raising capacity, the precariousness of public services, labor informality, and growing dependence on debt. The economist highlights that although Paraguay offers advantages such as low taxes, abundant energy, and cheap labor, the country attracted only USD 400 million in foreign direct investment in 2024, equivalent to 0.2% of the total captured by Latin America and the Caribbean. In the same period, Chile received USD 12.521 billion (6.6%), Peru USD 6.799 billion (3.6%), and Brazil, the region’s largest recipient, USD 71.070 billion (37.6%).
According to data from the Ministry of Economy and Finance (MEF), Paraguay’s public debt reached a historic level and by the first four months of 2026 had already hit USD 21.7812 billion, representing 36.2% of Gross Domestic Product (GDP). This amount reflects a 6.5% increase over four months, or USD 1.3333 billion more in nominal terms compared to USD 20.4479 billion in December last year. Year-on-year growth reached USD 2.7172 billion, or 14.2%, compared to USD 19.064 billion in April 2025. In April alone, the debt expanded by USD 396.9 million.
External debt accounts for USD 18.3256 billion, or 84.1% of the total, growing by USD 940.1 million in the first four months of the year, while internal debt totals USD 3.4556 billion (15.9%). The official report shows a strong reliance on commitments in U.S. dollars: of the USD 21.7812 billion owed, USD 15.4212 billion is in dollars, representing 70.8% of the total. The remainder is divided between USD 5.8914 billion in guaraníes and USD 468.5 million in other currencies.
Despite the steady increase, the MEF maintains that the debt level remains manageable and that it “constitutes one of the strengths of public finances” compared to other countries in the region. Economy Minister Oscar Lovera stated that current levels are “controlled.”