Trade and Economic Dynamism in Paraguay

The Republic of Paraguay is, since August 15, led by pro-business President Mario Abdo. Located in South America, Paraguay has a total territory of 406.752 square kilometers, which is almost the same size as California. Geographically, Paraguay is a landlocked country bordering Argentina, Bolivia, and Brazil. Likewise, the country is dominated by grassy hills and some wooded hills as well as the Paraguay River.

Currently, Paraguay has a total population of 7 million citizens, with an average age of 29 years. Furthermore, about 62% of the population lives in an urban setting, notably the capital city of Asuncion with its 3.2 million inhabitants.

Trade and Economic Dynamism in Paraguay

The annual gross domestic product (GDP) of Paraguay is US$89 billion (PPP) and the national economy has experienced positive economic growth upwards of 3.1% in recent years. As of today, the national economy is divided into 18% agriculture, 28% manufacturing, and 54% services. Meanwhile, the national labor force is divided into 26% working in the agriculture industry, 19% working in the industrial sector, and 55% working in services. Similarly, the national agriculture industry utilizes about 54% of the national territory, while another 44% is forested.

In terms of natural resources, Paraguay has timber, iron ore, manganese, limestone, and hydropower. Within manufacturing, the national industry is focused on sugar processing, cement, textiles, beverages, wood products, steel, base metals, and electric power. Simultaneously, the country’s agricultural industry has as main products cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava, tapioca, fruits, vegetables, beef, pork, eggs, and milk.

In terms of trade, Paraguay is the world’s 87th largest export economy. During 2016, the country imported US$9.7 billion worth of goods and exported US$8.7 billion, resulting in a trade deficit of US$1 billion. Furthermore, that same year, the country’s main export, representing 24% or US$2.1 billion of the total, was electrical energy (mainly produced by hydropower). On the other hand, Paraguay’s main import, representing 7.8% or US$754 million of all international purchases, was refined petroleum. Meanwhile, Paraguay’s main trading partners are Brazil, Argentina, Chile, the United States, China, and the European Union.

Unfortunately, in Paraguay, some 800.000 people suffer from undernourishment. In recent years, the average per capita protein intake of animal origin amongst the Paraguayan population has been 34 grams daily. Simultaneously, land distribution and output in the country have evolved throughout the last half century. Back in 1961, permanent pastures and meadows in Paraguay covered 9.6 million hectares, while arable land covered 700.000 hectares and permanent crops covered 111.000 hectares. More recently, by 2016, permanent pastures and meadows had increased to cover 17 million hectares, while arable land represented 4.8 million hectares and permanent crops accounted for 85.000 hectares.

Likewise, the domestic cereals market in Paraguay has evolved during the last half century. Back in 1961, the country devoted approximately 111.600 hectares of land to the production of cereals and produced 139.700 metric tons annually. In 2016, Paraguay devoted 1.64 million hectares of land to cereals production and yielded some 7.3 million metric tons.

(Read more about Trade, Macroeconomics & Agribusiness in Chile)