Spending on salaries in Paraguay's Central Administration grew 8.3% through May 2026 and now accounts for 53% of tax revenue, while tax collections rose just 1.2%, prompting the government to announce austerity measures.
Caja Fiscal
Pytagua coverage mentioning Caja Fiscal.
The Paraguayan government enacted Decree No. 6120/2026 to implement austerity measures in 2026, but analysts warn that one-off cuts are insufficient and are calling for structural reforms in public procurement, civil service management, supplier debt, and the Caja Fiscal deficit.
Prosecutors filed charges against Gianina García Troche for laundering drug-trafficking proceeds, while the Ministry of Economy announced that May salary and social-benefit payments begin this Friday.
Data from the 2025 Social Security Statistical Bulletin show that at IPS, the average benefit for retirees exceeds the average salary of active contributors, while other funds, such as Cajubi and Bancária, maintain high replacement ratios but below 100%. The Ferroviária fund has the lowest rate, at only 21.7%.
President Santiago Peña acknowledged that the monthly deficit of the Social Insurance Institute (IPS) exceeds US$ 20 million and suggested increasing revenue, reducing evasion, and improving spending efficiency, while IPS President Isaías Fretes announces cuts to obsolete medications and administrative reorganization.