Paraguay's Ministry of Economy and Finance (MEF) is finalizing the draft National General Budget (PGN) for 2027, which projects a fiscal deficit of 3.9% of Gross Domestic Product (GDP), higher than the 3.2% estimated for 2026. Minister Oscar Lovera confirmed that the proposal, to be sent to Congress by September 1, includes authorization to contract new debt of approximately $600 million, intended to settle outstanding obligations with pharmaceutical companies and construction firms. The operation may be conducted through sovereign bond issuance or loans with multilateral organizations.
Lovera stated that, disregarding this payment of accumulated debts, the structural deficit for 2027 would be only 1.9%. He assured that the country's debt level will remain below 40% of GDP, supported by economic growth. For budget preparation, the MEF is working with an exchange rate projection close to the current rate, around G. 6,000 per dollar, a variable considered critical due to the country's exposure to external factors.
Experts, however, warn about the risks of the fiscal trajectory. Economist and former Finance Minister Dionisio Borda stated that sustainability depends on increasing tax revenue and containing spending, measures difficult to implement in the final two years of a government that loses political strength. Borda classified the recognition of debt as an obligation, not an achievement, and questioned the government's ability to cut tax exemptions or contain the expansion of public spending.
The president of Congress, Senator Basilio "Bachi" Núñez (ANR-Honor Colorado), described the situation as "fiscal irresponsibility" and advocated for the need for a "political message" to contain the deficit. He announced that he is drafting a bill to improve public spending and advocated for identifying and holding accountable the managers who contributed to the accumulation of debts, especially in the health sector, which could reach $2 billion. Núñez even suggested analyzing a mechanism similar to the U.S. "government shutdown" in case of failure to meet targets.
In line with the criticisms, economic analyst Víctor Pavón warned that the deficit will continue growing without containment of current spending and a deeper reform of the Fiscal Fund, whose deficit already exceeds $320 million. Pavón argued that current monetary stability could be affected if the state needs to incur more debt or resort to monetary issuance to cover the shortfall. He also criticized the lack of targeting in social programs, such as Hambre Cero, which in his assessment have pressured public accounts.
The government maintains that it does not plan to create new taxes or increase rates in 2027, but is evaluating the elimination of some tax exemptions. The official goal is to return to the 1.5% of GDP limit established by the Fiscal Responsibility Law only in 2028, in a new convergence plan whose viability is met with caution by analysts and lawmakers.