Economist Gladys Benegas argues that the review of Paraguay’s Fiscal Responsibility Law (FRL) should assess not only the annual deficit limit, but also expenditure execution, the cost of keeping public funds idle and returns on financial investments.
The debate gained a regional example with Argentina’s 29 state trust funds, created by law to finance areas such as roads, drinking water, housing and transport. In the first two years of Javier Milei’s government, these funds collected more than 8.2 trillion pesos, but executed 55.8% of their resources in 2024 and 69.5% in 2025. The unused balance was invested in Treasury bills and bonds issued by the Treasury itself, helping sustain the “zero deficit” target.
The money remained in the public sector, but temporarily ceased to serve its original purpose. The Water Infrastructure Trust Fund, intended for flood-control works, held about 258 billion pesos in Capitalization Bills (LECAPs) in April 2026, while projects in the Cuenca del Salado continued to be delayed. The case shows how a balanced fiscal result can coexist with delays in delivering works required by law.
Argentina’s mechanism is not replicated in Paraguay, which has no equivalent structure of trust funds. Paraguay does, however, have resources with a legally specified purpose, such as those of the National School Feeding Fund (FONAE), which receives, among other sources, funds from compensation for the transfer of Itaipú energy. The legislation defines how these resources are to be used, but not necessarily how they should be managed while awaiting execution.
In other cases, state agencies and entities keep a significant share of their liquidity in the financial system, in demand deposits and savings certificates of deposit. These deposits can generate returns, but the state also turns to the market for financing and pays interest. The question raised by Benegas is whether to compare the return earned on deposited money with the cost of new borrowing.
The National Development Bank (BNF), a public development bank, is among the institutions holding these deposits, alongside private banks. When the funds remain at BNF, the return may stay within the state sector; when they are held at private banks, the bank retains the margin between the deposit cost and the return on the public securities it purchases.
The economist is not proposing that all liquidity be concentrated at BNF. Security, availability, profitability and management capacity must be compared in each decision. For the review of the FRL, the central point is to broaden the fiscal snapshot: measure not only how much the state collects and spends, but also what it fails to execute and the financial result of investments while the resources await their intended use.