Ministerio de Economía y Finanzas

The Senate voted 28 to reject Santiago Peña’s veto of the expropriation of part of a property in Nanawa to regularize an Essap water intake and treatment facility; the decision now goes to the Chamber of Deputies for review.

Paraguay’s Ministry of Economy and Finance issued G. 230.527 billion in Treasury bonds in September at lower interest rates, but in the smallest of the four local offerings in 2026, limiting what the sale shows about borrowing costs at a larger scale.

Paraguay has US$1,627.7 million in external financing for infrastructure, sanitation, energy and development, spread across operations at different stages of approval and administration. The amounts are not actual disbursements and should not be interpreted as entirely available for immediate implementation.

Paraguay’s public debt reached US$22.208 billion at the end of July 2026, around 12% more than a year earlier. The debt-to-GDP ratio nevertheless fell to 34.8%. A stronger guaraní contributed to the decline: the US dollar lost about 9.3% against the local currency between the end of December and the end of July. Meanwhile, Asunción reports payments of ₲73.4 billion toward obligations from earlier municipal bond issues.

The opening of the Integration Bridge is advancing in stages, while about 7,500 trucks have already traveled through the corridor and the Paraguayan access route to the International Friendship Bridge has potholes along approximately four kilometers of Ruta PY02.

Paraguay’s proposed 2027 budget projects a fiscal deficit of 3.9% of GDP, partly concentrated in the payment of overdue debts. Former minister Benigno López criticized it for doing little to expand public-service capacity while putting pressure on investment.

Paraguay will hold its fourth local Treasury bond issue of 2026 on September 23 through the Asunción Stock Exchange, reopening series maturing in 2030 and 2035 to finance the budget and expand the guaraní capital market.

The increase in U.S. interest rates to a range of 3.75% to 4% could strengthen the dollar and reduce the appeal of guarani-denominated assets, but analysts believe domestic factors should limit the immediate impact on Paraguay’s exchange rate.

Paraguay’s Central Administration executed ₲46 trillion between January and August 2026, with spending concentrated on salaries, transfers, social programs and health, which received ₲2.1 trillion to settle pharmaceutical obligations and maintain the supply of medicines and medical supplies.

Paraguayan teachers will hold a nationwide strike on September 17 and 18 to press for the inclusion of an 8% pay increase in the 2027 budget, with the possibility of expanding the mobilization and joining the doctors’ strike.

Paraguay’s draft 2027 National General Budget provides $76.5 million to subsidize public transport in Asunción and the metropolitan area, with coverage linked to public borrowing and, according to local reports, bond issuance. Lawmakers question the increase amid continuing service problems.

The Ministry of Economy and Finance transferred more than G. 2.33 trillion to Paraguayan departments and municipalities during the first eight months of 2026. A spreadsheet lists no transfers for Asunción and five other municipalities, but does not itself detail the individual reason in each case.

Itaipu Binacional transferred US$310 million to Paraguay in the first eight months of 2026 for royalties, energy transfers and ANDE investments, bringing transfers since August 2023 to US$1.532 billion to finance the public budget, school meals, construction and electrical infrastructure.

Paraguay’s 2027 General National Budget bill projects a fiscal deficit of 3.9% of GDP, spending of G. 166.3 trillion and increased funding for social programs, including 30,000 new beneficiaries of the elderly pension.

Santiago Peña reaffirmed that he will not raise taxes as the government reviews tax exemptions estimated at about US$1 billion and faces demands from doctors for higher pay and protests over health services.

The Older Adults Program will cost US$564 million in 2027, add 30,000 people and reach 406,000 beneficiaries, while about 100,000 will complete enrollment in 2028; Economy and Finance Minister Óscar Lovera also reported that an additional US$200 million is already included in the 2026 budget for medicines and supplies, rejected a general 76% raise for 12,000 doctors for lack of financing, and Rossana González acknowledged much of the data about her two positions with the Ministry of Health, dual employment with the Social Security Institute (IPS), monthly income of about G. 25 million, and alleged care for 37 patients in 2025 and none in 2026, saying she works at San Pablo Hospital, which has 1,200 vulnerable employees.

Paraguay’s public debt rose 15% in 12 months to reach US$21.947 billion in the first half of 2026, equivalent to 34.4% of GDP, as the government prepares a plan to reduce the deficit to 1.5% by 2028.

The Paraguayan government will keep tax rates unchanged through 2028 but will review exemptions and regimes such as maquila, estimated at up to US$1 billion, while lawmakers debate new taxes and spending cuts to finance public priorities.

Paraguay’s 2027 General National Budget bill provides for spending of G. 166.322 trillion, an 11.2% increase and a deficit of up to 3.9% of GDP, but excludes the pay increase demanded by striking doctors, while five babies were transferred after a flea infestation in a neonatal unit in Ciudad del Este.

At least 197 specialist doctors formally submitted resignations in Paraguay after a five-day strike, as patients report shortages of medicines and supplies; the government attributes rejection of a across-the-board raise to fiscal constraints and is considering measures to fill vacancies, regularize 2,390 contracted workers and include US$760 million for medicines and supplies in the 2027 budget proposal, which has not yet been approved. University lecturers are also threatening mobilization, while Eduardo Nakayama proposes eliminating state-paid private insurance to direct US$100 million to US$120 million annually to public health without shifting pressure to the Social Security Institute (IPS), which is facing its own crisis.

Mercosur held the first round of talks with Vietnam in Buenos Aires on a preferential trade agreement aimed at expanding market access, diversifying exports and fostering investment.

Amid a nationwide doctors’ strike, Paraguay is debating higher taxes on tobacco and other levies to fund health care, while economists and business leaders argue for better public management, less waste and policy predictability to avoid harming investment.

Paraguay’s Executive Branch has decreed a reduction from 1.5% to 1.4% per month in the interest rate for tax installment agreements administered by DNIT, the country’s tax authority, starting September 1, 2026.

The Paraguayan government is negotiating $1.3 billion in loans with CAF, the Inter-American Development Bank, the World Bank and JICA for infrastructure, energy and logistics projects, with $700 million earmarked for the Ministry of Public Works and Communications.