Paraguay is a developing country with agriculture, trade
and light industry as the main trade routes. Much of the
economic activity in the country takes place on an informal
basis. Among other things, poor border control and
corruption makes re-export of consumer goods an attractive
business for many. Because of the large, informal sector,
the real economic activity in the country is therefore
difficult to measure. It is assumed that service industries
in 2013 accounted for approx. 61.9% of GDP, small scale
industry for 17.7% and agriculture for 20.4%.
countryaah, Paraguay's economy grew rapidly in the period 2003-2008.
Strong dependence on export goods from the agricultural
sector, poor crops and a decline in world market demand led
to economic downturns in 2008–2009. A 13% growth in GDP in
2010 and 12% in 2013 has made Paraguay one of the fastest
growing economies in South America. However, high political
instability and corruption are two of several important
factors that threaten long-term economic stability and
As one of the most rural countries in South America,
agriculture has been fundamental to Paraguay's economic
development, and remains the mainstay of the country's
economy today. As of 2013, agriculture (incl. Forestry and
fishing) employed approx. 26.5% of the working population
contributed 20.4% of the gross domestic product (GDP).
For the country's poor in rural areas, subsistence
agriculture is the only way of life, while for large
landowners, exports of agricultural products such as meat,
maize, grain and especially soy have created great wealth.
Paraguay's significant economic growth since 2010 is mainly
due to increased exports of these agricultural commodities.
For example, soy alone accounted for 40% of export revenue
At the same time, the importance of agriculture in the
country is constantly creating political unrest. Among other
things, the extreme distortion of land is a recurring theme,
where marginalized small farmers demand land reform. As of
2012, 2% of landowners controlled 80% of the total
The best agricultural areas are in the east. Large
quantities of soybeans, cotton, sugar cane, cassava, wheat
and corn are produced here. As of 2013, Paraguay was the
fourth largest soy producer in the world. Animal husbandry,
essentially cattle and pigs, is also important. On
overcrowded small farms in the southeast, manioc, corn,
sugar cane and sweet potatoes are grown, mostly for their
own use. In the east, there is mainly extensive animal
It is not until the 1970s that forestry has been run to
any great extent. Then considerable logging work started,
also to increase agricultural land in the east. For a while
there has been a harvest ban for some species of wood, and
an order for new forestry to maintain forest resources, but
there is some significant illegal forestry and export.
Alongside timber and the quebracho tannery, wood oil is also
extracted from the coyol palm.
Paraguay has been self-supplied with electricity since
1976, and exports electrical power to Brazil and Argentina.
Electricity production came to 51.5 billion kWh in 1999,
almost exclusively from hydropower as an energy source. In
1999, the country exported 46 billion kWh.
The industry is largely based on the processing of raw
materials from agriculture and forestry, and employs 18.5%
(2013) of the working population. In 2002, the industrial
sector contributed 26% of GDP, compared with 17.7% in 2013.
Expected growth rate in the coming years is an average of
3.7% per year.
The food industry is based on the processing of
agricultural products in slaughterhouses and oil mills, in
particular the processing of soybeans. In addition, there
are textile, soap, cigarette and shoe industries as well as
cement mills and sawmills. Most of the industrial production
takes place in small and medium-sized enterprises.
Paraguay, in collaboration with Brazil, built the Itaipú
dam, which is the world's second-largest hydropower plant
measured in hydropower production. Only the Three Gorges dam
in China has greater production. Paraguay is almost 100%
self-sufficient in hydropower.
Paraguay traditionally has a trade deficit with foreign
countries. In 2001, the import value was USD 3077 million,
the export value USD 1237 million. The main export products
are various oilseeds, especially soybeans, cotton, timber,
timber and meat products. Among other things, it imports
machinery and transport equipment, fuels, chemicals,
pharmaceuticals, etc. Traditionally, Brazil has been the
most important trading partner. Other important trading
countries are the USA, Japan, the Netherlands and Argentina.
Transport and Communications
The rivers of Paraguay and Paraná account for most of the
transport of merchandise. In particular, Paraguay, which
forms a 1260 km long axis through the country in the
north-south direction, is of great importance, and over
Paranás 1630 km through Argentina to Buenos Aires, most of
Paraguay's foreign trade goes. The Pan-American Highway goes
approx. 700 km inland, and another main road (Trans-Chaco)
leads from Asuncion to Bolivia. A large part of the road
network is without a fixed tire. An international airport is
located at the capital Asuncion, and from 1996 also at
Ciudad del Este, at the southern end of the Itaipud dam.