The rigid expenditures of the Paraguayan state, which include public sector salaries, public debt service, and pensions, consumed 81% of the transfers made with tax resources in the first half of 2026. According to a report from the General Treasury of the Ministry of Economy and Finance (MEF), these mandatory expenses totaled the equivalent of USD 4.23 billion, leaving a narrow margin for investment in public works and other capital expenditures.
The largest share came from public sector remuneration, which amounted to USD 1.99 billion, representing 55% of all resources collected from taxes. Public debt service came in second, at USD 875 million, while transfers to the deficit-ridden Fiscal Pension Fund (Caja Fiscal), which covers public sector pensions, totaled USD 784.1 million.
Economist Luis Rojas argues that containing the expansion of these expenses would require increasing tax collection, a structural challenge for the country. He suggests reducing privileges in the salary structure and combating corruption and patronage, although he states this is complex under the current government. In parallel, the head of the National Directorate of Tax Revenue (DNIT), Óscar Orué, rejected raising taxes and instead proposed eliminating tax incentives, such as those under the Maquila and Free Zone laws, to generate additional revenue.
In this context, the credit rating agency Moody's Ratings maintained Paraguay's Baa3 rating with a stable outlook but issued a warning. The firm highlighted that delays in payments to suppliers, acknowledged at the beginning of 2026 and equivalent to 2.1% of GDP, expose weaknesses in the state's capacity to plan and manage its public finances.
Moody's assesses that, despite the country's solid macroeconomic performance, the persistence of payment delays or a fiscal deterioration that increases indebtedness could negatively pressure the credit rating in the future. The agency emphasizes that institutional strengthening and better management of cash flows are crucial to avoid a new accumulation of outstanding debts and to consolidate Paraguay's investment profile.