Paraguay's public debt stood at US$22.208 billion at the end of July 2026. This was US$1.760 billion, or 8.6%, higher than at the end of December 2025 and US$2.575 billion, or about 12%, higher than in July of the previous year.
According to the Ministry of Economy and Finance (Ministerio de Economía y Finanzas, MEF), the increase was driven mainly by additional bond issuance and new loan disbursements.
Why the debt ratio still fell
Despite the increase in the amount owed, public debt as a share of gross domestic product (GDP) fell from 41.1% at the end of December 2025 to 34.8% in July 2026. The ratio had stood at 39.1% in July 2025.
One factor is the exchange rate. According to the Central Bank of Paraguay (Banco Central del Paraguay, BCP), the reference rate was ₲6,575.71 per US dollar on 31 December 2025 and ₲5,965.93 on 31 July 2026. The dollar therefore declined by about 9.3% over the seven-month period. A stronger guaraní, all else being equal, increases the dollar value of Paraguay's GDP and can therefore reduce the debt-to-GDP ratio.
The exchange rate is not the only factor. Changes and revisions in nominal GDP also affect the calculation. The lower debt ratio therefore does not mean that Paraguay reduced its debt: the absolute amount of public debt increased over the same period.
More than 80% owed to foreign creditors
Of the US$22.208 billion total, US$18.398 billion, or 82.8%, was external debt. Domestic debt amounted to US$3.810 billion, or 17.2%.
Major components of external debt include loans from multilateral financial institutions and Paraguayan sovereign bonds issued on international capital markets. Multilateral loans amounted to US$8.953 billion at the end of July, while international bonds accounted for US$9.090 billion.
Asunción pays obligations from earlier bond issues
Separately from national public debt, the Municipality of Asunción reported payments toward obligations arising from municipal bonds issued during previous administrations.
According to the city's financial administration, ₲73,389,753,425 has so far been paid toward these obligations. The current administration said it has not issued new municipal bonds or incurred new debt through this mechanism during its term.
On 15 September, ₲22,448,452,055 was transferred for coupon payments on the G8 S1 and G7 S3 bond series. The transfer was therefore a payment toward obligations associated with the bonds, rather than repayment of the entire corresponding bond principal.
A further ₲18,653,465,753 relating to the G8 S2 and G6 S3 series remained outstanding. According to the parties involved, discussions on settling this amount remained open.
The two developments concern different levels of public finance: Paraguay's national debt stock continues to grow, while Asunción is servicing obligations stemming from municipal bonds issued in earlier administrations.