Salary spending in Paraguay's Central Administration grew 8.3% year-on-year through May 2026, reaching 9.75 billion guaranis (approximately $1.598 billion) in the accumulated figure for the first five months of the year, according to the Situfin report released by the Ministry of Economy and Finance (MEF).
The data shows that public sector workers' compensation already accounts for 53% of tax revenue collected. For every 100 guaranis collected, approximately 53 go toward salary payments, 80% of which are concentrated in health, education, and security.
Total Central Administration expenditures reached 24.014 billion guaranis through May, an 11% increase compared to the same period last year, while revenues came in at 23.03 billion guaranis, an advance of just 1.2%.
The MEF noted that the growth in salary spending was driven mainly by the Ministry of Public Health, the Ministry of Education and Sciences, the Ministry of the Interior, and the Judiciary, both through minimum wage adjustments and staff expansions.
Monthly salary spending increased gradually over the year, from 1.86 billion guaranis in January to 1.99 billion in May.
At the same time, social benefits saw an even larger increase. The government allocated 4.90 billion guaranis ($803 million) to these payments through May, a 17% increase from the previous year, representing approximately 31% of tax revenue.
The rise was driven by programs such as Hambre Cero, Adultos Mayores, Tekoporã, and contributory pensions. On public sector retirements and pensions alone, the Treasury disbursed 2.62 billion guaranis ($431 million) through May.
The Caja Fiscal, which administers retirements and pensions for a portion of public sector workers, accumulated a deficit of 1.11 billion guaranis ($182 million) during the period, an amount covered largely by National Treasury resources.
The pressure on public accounts led the government to announce austerity measures with estimated savings of $262 million, in a context that the MEF itself describes as a "wartime economy" due to the drop in revenue.