Key Points
Paraguay’s activity indicator rose 5.9% in December, closing 2025 with 6% cumulative growth — far above the Central Bank’s initial 3.8% forecast
Record corn harvests, an 8.2% manufacturing surge, and broad services expansion drove twelve consecutive months of gains across all sectors
With inflation at 3.1% and over $700 million in approved investments, the landlocked economy is Latin America’s quiet outperformer
Six percent growth. Inflation at 3.1%. Every sector positive for twelve straight months. Paraguay’s 2025 report card, released Wednesday by its Central Bank, reads like a wish list for most Latin American finance ministers — and it came in well above what even Asunción expected.
The monthly activity indicator (IMAEP) rose 5.9% year-on-year in December, capping a full-year expansion that nearly tripled the regional average. The Central Bank had originally forecast 3.8%. “We underestimated the capacity of the Paraguayan economy,” BCP President Carlos Carvallo acknowledged when the upgrade became clear.
Paraguay Posts 6% Growth for 2025 — Nearly Triple the Regional Average. (Photo Internet reproduction)
Agriculture anchored the boom. The primary sector grew 7.4% for the year, fueled by record corn and strong wheat, rice, and cotton harvests — though weaker soybean output tempered the result. Manufacturing surprised even more, surging 8.2% in December and 5.7% for the year, led by oils, dairy, sugar, and metals. Construction expanded on accelerating public and private works.
Services, the largest segment, grew 5.1% annually, with financial intermediation, transport, hotels, and telecoms all contributing. The breadth matters: unlike commodity-dependent neighbors, Paraguay‘s expansion was balanced across sectors, underpinned by 146,000 new jobs created during the year.
What makes this internationally relevant is the stability accompanying the growth. Inflation closed below the Central Bank’s own forecast. The benchmark rate held at 6%. Moody’s awarded investment-grade status in 2024, and over $700 million in new investments were approved in 2025, including 21 maquila projects in auto parts, textiles, and food processing. The Central Bank projects 4.2% for 2026 — which would give Paraguay four consecutive years above 4%, an unprecedented streak.
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