Paraguay's 6.6% GDP Growth Masks External Vulnerabilities with -3.2% Current Account

The context

Paraguay has delivered a 6.6% GDP expansion—a standout performance in the Latin American context—while maintaining inflation at 4.0% and unemployment at just 4.8%. This growth trajectory reflects the economy's dual character: a dynamic agricultural export sector (with exports reaching 37.2% of GDP) and resilient domestic consumption underpinned by low joblessness. The economy's trade openness of 76.5% positions Paraguay as deeply integrated into regional and global value chains, with hydroelectric power and agricultural commodities forming the export backbone. Yet this openness also transmits external shocks directly into domestic economic conditions, particularly through the exchange rate channel currently sitting at 5,968.6974 guaraníes per dollar.