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President Santiago Peña's government remains committed to reducing the fiscal deficit to 1.5% of GDP, as required by the Fiscal Responsibility Law, rejecting pressure from sectors advocating increased public spending.
deficit-fiscalsantiago-penaParaguay's Ministry of Economy and Finance reported that the cumulative fiscal deficit from January to April 2026 was 0.8% of GDP, within the 1.5% limit. The result reflects moderate revenues, exchange-rate impact and spending in strategic sectors.
deficit-fiscalmefThe Ministry of Economy and Finance (MEF) and the National Directorate of Tax Revenue (DNIT) have begun new revenue and expenditure estimates to decide whether to raise the fiscal deficit cap, currently set at 1.5% of GDP. The move comes after first-quarter revenue fell short of expectations, while the accumulated deficit has already reached 0.8% of GDP and the annualized figure stands at 2.2%.
deficit-fiscalmefdnitcavialpafactoringDelays in paying Paraguayan government debts, totaling $1.5 billion in 2025, have already generated over $200 million in extra costs, according to economist Sergio Sapena. He points to three negative effects of the arrears and advocates raising the fiscal deficit to 6% of GDP as a solution.
deficit-fiscalsergio-sapenaEconomist Arnold Benítez says the sharp drop in the dollar pressures revenue and the 2026 budget, while delays in payments to suppliers create a chain of problems that make the state itself more expensive. He advocates prioritizing spending quality and using mechanisms such as factoring to regularize the debt.
deficit-fiscalpg-2026arnold-benitezThe Paraguayan Road Chamber (Cavialpa) demands from the Ministry of Economy and Finance (MEF) the regulation of the factoring system to settle state debts with contractors. The sector warns that delays force private indebtedness and that current payments do not reduce the accumulated liability.
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