Paraguay closed 2024 with a stronger-than-expected economic growth rate of 4.2%, surpassing the initial forecast of 4%. This impressive performance, reported by the Central Bank of Paraguay (Banco Central del Paraguay – BCP), reflects the resilience and diversification of the country’s economy in the face of global uncertainties. The result places Paraguay among the more stable and steadily growing economies in Latin America.
In this article, we’ll break down the key drivers behind Paraguay’s 2024 GDP growth, analyze sector-specific data, and explore what this means for future investment, trade, and development in the country.
Paraguay’s 2024 GDP Growth: Overview
According to official data, Paraguay’s economy grew by 3.6% year-on-year in the fourth quarter of 2024, bringing the full-year expansion to 4.2%. The growth was primarily driven by strength in the services, construction, and manufacturing sectors, with agriculture also making a positive—albeit modest—contribution.
This performance not only reflects strong internal demand and productive capacity but also shows Paraguay’s increasing economic maturity as it reduces overreliance on agriculture and embraces a more diversified economic structure.
Key Sectors Driving Paraguay’s Economic Growth
1. Services Sector – 4.8% Growth
The services sector was the largest contributor to GDP growth in 2024, expanding 4.8% in both Q4 and the full year. Within this category, several sub-sectors stood out:
- Household services such as education, healthcare, and recreation.
- Financial intermediation and insurance, reflecting increased access to credit and financial inclusion.
- Transport and logistics, which benefited from cross-border trade and internal demand.
- Restaurants and hotels, showing a post-pandemic recovery in tourism and hospitality.
This sector’s performance reflects both growing consumer confidence and structural improvements in Paraguay’s service infrastructure.
2. Construction Sector – 5.3% Annual Growth
The construction industry delivered some of the most impressive numbers in 2024. It grew by 13.6% in the last quarter and 5.3% over the full year, fueled by both public infrastructure projects and private sector investment in housing, commercial developments, and industrial facilities.
This sector’s rebound indicates an optimistic investment climate and points to broader macroeconomic stability. It also highlights Paraguay’s growing need for modern infrastructure, urban expansion, and connectivity.
3. Manufacturing and Industry – 4.4% Annual Growth
The industrial sector expanded by 3.1% in Q4 and 4.4% annually, with growth fueled by a wide range of manufacturing activities:
- Food processing: particularly meat, sugar, dairy, and baked goods.
- Beverages and tobacco, showing strong domestic and regional demand.
- Textiles, clothing, leather goods, and non-metallic mineral production, essential for both domestic use and exports.
- Machinery and equipment, as well as metal processing, which indicate a more capital-intensive and technologically advancing industry.
This diversification within manufacturing is key for long-term sustainable growth.
4. Agriculture – 2.8% Annual Growth Despite Q4 Dip
The agricultural sector saw a 4.3% contraction in Q4, due to seasonal factors and crop-specific declines (especially corn). However, it still posted a 2.8% increase for the full year, supported by higher yields in:
- Soybeans
- Wheat
- Rice
- Cotton
- Yerba mate
While still a pillar of Paraguay’s export economy, agriculture’s smaller contribution to total GDP growth compared to other sectors signals the country’s successful pivot toward industrial and service-led growth.
Investment Implications: Why Paraguay Remains a Top Emerging Market
With a growing middle class, political stability, a favorable tax regime, and access to the MERCOSUR trade bloc, Paraguay continues to attract foreign direct investment (FDI) in key areas like logistics, agro-industry, construction, and financial services.
The 2024 GDP growth of 4.2% confirms that Paraguay offers a stable macroeconomic environment, low inflation compared to regional peers, and improving infrastructure—all of which are critical factors for investors looking at Latin American markets.
Economic Outlook for 2025
Looking ahead, Paraguay is expected to maintain moderate but steady growth in 2025, supported by:
- Continued recovery in global commodity markets.
- Ongoing infrastructure investments (e.g., highways, energy, digital infrastructure).
- Private sector expansion, particularly in services and real estate.
- Improved access to international financing and credit.
Challenges remain, especially related to external shocks (like commodity price volatility or climate change impacts on agriculture), but the country is well-positioned to navigate them with its current economic model.
Final Thoughts: Paraguay’s Growth is Real and Sustainable
The 4.2% economic growth in 2024 is not just a statistical victory – it represents real progress in diversifying the Paraguayan economy, strengthening internal markets, and attracting investment. For business leaders, policy makers, and investors alike, Paraguay offers a compelling case study in how sound macroeconomic management and targeted sectoral policies can deliver tangible results.
As Paraguay continues to modernize its economy, digitalize its industries, and expand its role in global trade, it is poised to become one of South America’s most promising emerging economies in the next decade.
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