Economist Sergio Sapena argues that Paraguay should significantly increase its public debt, from about 35% to up to 70% of GDP, a level he considers sustainable and necessary to finance infrastructure and accelerate economic growth. In an interview with the newspaper Última Hora, he contends that bond issuance is the backing for the monetary expansion of the Central Bank of Paraguay (BCP) and that the country is "stagnated" due to low investment levels.
Sapena proposes that the country issue approximately $2 billion in bonds per year for five years and raise the fiscal deficit to 6% of GDP, criticizing the current government targets of 3.2% in 2026 and 3.9% in 2027 as insufficient. He also advocates prioritizing debt issuance in guaranis to reduce exposure to exchange rate fluctuations.
Meanwhile, data from the Ministry of Economy and Finance (MEF) show that, during the Santiago Peña administration, Paraguay issued $3.5 billion in international bonds and about $2 billion in the domestic market, totaling $5.4 billion. Public debt reached 34.4% of GDP in June.
Economists such as Dionisio Borda, a former finance minister, express concern about the accelerated pace of indebtedness, especially in a context of fiscal deficit, low tax revenue, and rising spending. Borda warns that the $3.5 billion in sovereign bonds issued during this administration already exceed the issuances of previous governments, with two years remaining in the term.
Luis Rojas, another economist, criticizes the practice of "debt cycling," where new issuances are used to refinance old debts without addressing underlying fiscal problems. He cautions that this increases interest rates and pressures the budget, limiting resources for development investments.
The MEF stated that it seeks to increase the share of debt in local currency to about 30%, as part of a de-dollarization strategy. Currently, 24% of the Central Administration's debt is in guaranis. Borda views this initiative positively, as it reduces exchange rate risk.