Paraguay GDP Growth Slows in 2Q26

Paraguay’s economy grew 4% year over year in the second quarter of 2026, easing from an upwardly revised 7.3% expansion in the previous quarter. Agriculture grew 11.1%, driven by higher production of soybeans, rice, beans, sunflower and tobacco, as well as corn, cotton, sesame and yerba mate. Net external demand made the largest contribution to GDP growth, with exports increasing 11.5% and imports falling 5.7%. Manufacturing expanded 1.8%, supported by higher production of oils, dairy products, sugar, beverages and tobacco, chemical and pharmaceutical products, paper, wood products, non-metallic minerals, base metals, and machinery and equipment. Construction grew 4.2%, reflecting increased activity in private projects and higher demand for key inputs. From the expenditure side, domestic demand fell 2.6% year over year, mainly due to an 11.8% contraction in gross fixed capital formation. Private consumption increased 3.2%, while government consumption rose 6.2%.

Paraguay’s economy expanded 5.8% year-on-year in the first quarter of 2026, easing from a 6.2% increase in the previous quarter. The services sector rose 6.6% on strong performances in transportation, financial intermediation, household and government services, real estate, restaurants and hotels, business services, telecommunications, information services, and valuation services. Manufacturing activity increased 6.0%, supported by higher production of oils, dairy products, sugar, milling and bakery products, beverages and tobacco, chemical and pharmaceutical products, paper, wood, non-metallic minerals, basic metals, machinery and equipment, and other manufactured goods. Agriculture grew 8.2%, driven by stronger soybean, sugarcane, cassava, beans, sunflower, and tobacco output. The construction sector expanded 5.6% on faster private-sector project execution, while utilities rose 4.7%, supported by solid performances in electricity distribution, water supply, and sanitation.

Paraguay's GDP expanded 6.2% year-on-year in Q4 2025, down from 6.7% in the previous quarter. Growth was driven by strong performance in services (5.7% vs 6.6% in Q3) and electricity and water (13.2% vs 8.3%), while agriculture rebounded sharply (20.8% vs 15.7%). On the other hand, expansion accelerated in construction (4.3% vs 3.4%) and in livestock, forestry, fishing and mining (3.9% vs 3.0%), whereas manufacturing eased (3.7% vs 7.3%). From the expenditure side, domestic demand rose 6.7%, slightly above the 6.2% recorded in Q3.