The Economic Commission for Latin America and the Caribbean (ECLAC) released, in its report Fiscal Panorama of Latin America and the Caribbean 2026, a detailed analysis of Paraguay's fiscal situation. The document warns that the structure of Paraguay's public debt, with high dependence on external creditors and obligations in foreign currency, represents a significant risk to the country's macroeconomic stability.
According to the report, debt to external creditors accounts for 89% of total public debt, placing Paraguay among the nations with the greatest dependence on foreign financing in the region, alongside Nicaragua and Panama. Domestic debt represents only 11% of the total, reflecting an underdeveloped domestic market and the limited capacity of the state to finance itself through the local financial system.
Furthermore, 82% of public liabilities are contracted in foreign currencies, mainly the US dollar. ECLAC highlights three interconnected macro-fiscal risks: exchange rate risk, as a depreciation of the guarani against the dollar automatically increases the real value of the debt and interest costs; vulnerability to volatility in foreign capital flows, which can make rolling over maturities difficult or more expensive; and sensitivity to international interest rates, which, in a scenario of restrictive financial conditions, raise the cost of new issuances.
The report emphasizes that external vulnerability is aggravated by a structural feature of the Paraguayan economy: low tax pressure, which increasingly requires indebtedness, including to pay off previous debts. Paraguay's tax revenues are below the regional average and far from the standard of more developed countries.
ECLAC warns that the assessment of Paraguay's debt should not be limited to its volume, but also to its structure. The combination of mostly external debt denominated in foreign currency makes the country highly vulnerable to external shocks, severely limiting fiscal maneuverability and compromising the ability to sustain dynamic social spending, in addition to exposing it to potential financing crises.