The Paraguayan government has reaffirmed its economic growth forecast of 4% for 2025, following a robust first half of the year despite the drought’s impact on agriculture. This was announced during the presentation of the Financial Situation Report (Situfin) by the Ministry of Economy and Finance (MEF). According to Felipe González, the Vice Minister of Economy, sectors such as construction, services, and industry are driving growth, showcasing a more diversified economy less reliant on agriculture. “Despite the drought’s impact on soybean production, economic activity has grown by 4%, in line with the Central Bank of Paraguay’s (BCP) projections,” González stated. He highlighted that unlike previous years, other sectors have offset the agricultural downturn. The BCP’s economic activity indicator, which includes agriculture, shows growth above 4%. Positive developments suggest the drought’s effects were less severe than anticipated, potentially allowing growth to exceed 4% by year’s end. The government reported a fiscal surplus of 0.19% of GDP in May, with a cumulative deficit of 0.3%. May marked the second consecutive month of surplus, following April’s 0.25%. Public investment rose by 36.3% compared to the same period in 2024, reaching G. 2,470 billion (USD 311 million), or 0.7% of GDP. These figures reflect progress towards the fiscal convergence target of 1.9% for the year.
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