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The deficit of Paraguay's Public Sector Pension Fund (Caja Fiscal) reached US$216 million in the first half of 2026, financed by the National Treasury, with the military, police, and teaching sectors being the primary contributors, while a reform approved by President Santiago Peña is considered a stopgap solution.
caja-fiscalSpending on salaries in Paraguay's Central Administration grew 8.3% through May 2026 and now accounts for 53% of tax revenue, while tax collections rose just 1.2%, prompting the government to announce austerity measures.
caja-fiscalThe Paraguayan government enacted Decree No. 6120/2026 to implement austerity measures in 2026, but analysts warn that one-off cuts are insufficient and are calling for structural reforms in public procurement, civil service management, supplier debt, and the Caja Fiscal deficit.
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