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Paraguay's external sector: trade, foreign direct investment, binational dams, reserves and the guaraní

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-28 · Status: Changing

Paraguay is an open, commodity and energy exporter: total exports were US$16,934.6 million in 2025, and the current account deficit widened to 2.8 percent of GDP as imports grew faster than exports. In the first half of 2026 exports rose 25.1 percent on soy, maquila and services, the trade balance turned to a US$746.6 million surplus and the current account returned to surplus, while the guaraní strengthened about 15 percent. The 1991 investment law gives foreign investors national treatment and free FX for capital and profits, and the Itaipú and Yacyretá dams, shared with Brazil and Argentina, make electricity a key export and fiscal revenue.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026, retrieved on the verification date, unless another rate is named (the MEF budget assumptions of PYG 7,545 average for 2025 and PYG 6,458 for 2027 are labeled where used). Conversions are for orientation only. BCP planilla of 28 October 2026: PYG 3.82 per Argentine peso and PYG 1,094.92 per Brazilian real.

Key facts

Total exports of goods, 202516934.6 USD millionMEF IFP 2026, section 1.2.5 (BCP data), as of 2025-12-31 · in force
Export growth, 20257.1 %MEF IFP 2026, section 1.2.5, as of 2025-12-31 · in force
Import growth, 202510.6 %MEF IFP 2026, section 1.2.5, as of 2025-12-31 · in force
Trade balance, 2025-1176 USD millionMEF IFP 2026, section 1.2.5, as of 2025-12-31 · in force
Current account balance, 2025-2.8 % of GDPMEF IFP 2026, section 1.2.5, as of 2025-12-31 · in force
Export growth, first half of 2026, year on year25.1 %MEF IFP 2026, section 1.2.5, as of 2026-06-30 · in force
Trade surplus, first half of 2026746.6 USD millionMEF IFP 2026, section 1.2.5, as of 2026-06-30 · in force
Maquila exports, first half of 2026716.7 USD millionMEF IFP 2026, section 1.2.5, as of 2026-06-30 · in force
Foreign direct investment, BCP figure for 2025 (26.5 percent of GDP, preliminary)13160.7 USD millionMEF Panorama Macroeconómico, July 2026, Indicadores Económicos (BCP Anexo Estadístico of 19 August 2026), as of 2026-07-31 · in force
Average exchange rate, 20257545 PYG per USDMEF IFP 2026, section 1.2.6, as of 2025-12-31 · in force
Average exchange rate, first half of 20266385 PYG per USDMEF IFP 2026, section 1.2.6, as of 2026-06-30 · in force
BCP reference quotation, Argentine peso3.82 PYG per ARSBanco Central del Paraguay, planilla de cotizaciones, as of 2026-10-28 · in force
BCP reference quotation, Brazilian real1094.92 PYG per BRLBanco Central del Paraguay, planilla de cotizaciones, as of 2026-10-28 · in force
Prior authorization or registration for foreign investmentNone beyond general legal requirements ruleLey Nº 117/91 art. 4, as of 1992-01-07 · in force
Free exchange for capital and dividend remittancesGuaranteed, subject to taxes ruleLey Nº 117/91 art. 6, as of 1992-01-07 · in force

The rule

1. The investment law aims to stimulate and guarantee investment with total equality between national and foreign investors. Foreign investors and the companies they take part in have the same guarantees, rights and obligations as national investors, with no limits other than those set by law, and private investment needs no prior authorization or registration beyond what the law requires. The law guarantees property rights, a free exchange regime with no restrictions on the entry and exit of capital or on remitting dividends, interest, commissions, technology royalties and other items abroad (subject to the taxes set by law), freedom to produce, set prices, import and export (except where the law regulates or prohibits), and the right to agree national or international arbitration, including with State entities. National and foreign investment are subject to the same tax regime.
Cost to do it: No authorization or registration fee for the investment itself under art. 4; taxes on remittances apply (see taxes/dividend-tax-idu and taxes/non-resident-withholding-inr).
Example: A foreign parent can wire PYG 1,000,000,000 of capital in and later remit dividends out without central bank approval; only the tax on the payment applies. / About US$170,407 at PYG 5,868.31.Ley Nº 117/91 De Inversiones, Art. 1, art. 2, art. 4, art. 5, art. 6, art. 8, art. 9 and art. 10, 1992-01-07 official text · verified 2026-10-28
2. International treaties validly signed, approved by a law of Congress and with ratification instruments exchanged or deposited form part of domestic law and rank below the Constitution but above ordinary laws. Congress approves or rejects treaties signed by the Executive. Trade agreements, including Mercosur and its agreements with third countries, therefore apply in Paraguay through their approving laws.Constitución Nacional de la República del Paraguay (1992, with the 2011 amendment to art. 120), Art. 137, art. 141 and art. 202 numeral 9, 1992-06-20 official text · verified 2026-10-28
3. Under the Yacyretá Treaty with Argentina, the dam and works on the Paraná river are a joint property (condominio) of both countries in equal parts, without changing borders or sovereignty. The energy produced is divided equally between the two countries, each with a preferential right to buy the energy the other does not use for its own consumption, and both countries undertake to buy, jointly or separately, the whole installed capacity. The Itaipú Treaty with Brazil follows the same equal split, with energy Paraguay does not use ceded to Brazil for compensation (MEF description).
Example: Royalties and compensation from Itaipú and Yacyretá were PYG 3,451.7 billion of Central Administration revenue in 2025, 25.8 percent less than in 2024 (MEF, IFP 2026, Table 2). / About US$457 million at the 2025 average rate of PYG 7,545 per US dollar.Ley Nº 433 que aprueba y ratifica el Tratado de Yacyretá entre la República del Paraguay y la República Argentina (signed 3 December 1973), Treaty art. V (joint property) and art. XIII (energy), 1973-12-28 official text · verified 2026-10-28
4. In 2025 total exports reached US$16,934.6 million, up 7.1 percent, led by re exports and agricultural and industrial manufactures (beef, industrial goods and maquila). Imports rose 10.6 percent on consumer and capital goods, leaving a trade deficit of US$1,176 million. In balance of payments terms the goods deficit widened from US$1,153 million in 2024 to US$1,795 million and the current account deficit reached 2.8 percent of GDP. In the first half of 2026 exports grew 25.1 percent (soybeans, soybean oil and beverages), maquila exports reached US$716.7 million (up 29.6 percent), imports rose 9.2 percent and the trade balance showed a US$746.6 million surplus; the current account was in surplus in the first two quarters of 2026 after six quarters of deficit, helped by services such as crypto mining and maquila.Ministerio de Economía y Finanzas, Informe de las Finanzas Públicas 2026, section 1.2.5 (Banco Central del Paraguay data), Section 1.2.5 Cuentas externas, 2026-10-23 official text · verified 2026-10-28
5. The guaraní averaged PYG 7,545 per US dollar in 2025, practically unchanged from PYG 7,560 in 2024, but ended December 2025 with a 13.9 percent year on year appreciation. In the first half of 2026 it averaged PYG 6,385 per dollar, 15.4 percent stronger than the 2025 average, and was 23.1 percent stronger year on year in June 2026. A BCP technical note of 2 June 2026 attributes the appreciation to better fundamentals (including the second investment grade rating), a strong financial system, capital market reforms, a weaker global dollar, correction of the early 2025 depreciation and transitory factors such as large soy exports. The MEF assumes an average of PYG 6,217 for 2026 and PYG 6,458 for 2027.
Example: A monthly local cost base of PYG 600,000,000 cost about US$79,523 at the 2025 average rate of PYG 7,545 and about US$102,244 at PYG 5,868.31 on 28 October 2026. / About 28.6 percent more in US dollars for the same guaraní costs.Ministerio de Economía y Finanzas, Informe de las Finanzas Públicas 2026, section 1.2.6 and Table 17, Section 1.2.6 Tipo de cambio; Table 17, 2026-10-23 official text · verified 2026-10-28
Indicator2022202320242025
Exports of goods and services (national accounts)9,530.1912,337.1311,409.0813,745.59
Imports of goods and services (national accounts)11,037.3411,918.8711,690.0514,785.95
Current account, % of GDP-6.40.3-3.2-2.8
Foreign direct investment (BCP)10,260.311,430.611,980.313,160.7
International reserves9,449.610,267.710,393.910,674.7
Exchange rate, PYG per USD, end of period7,238.77,335.27,810.26,725.0

External sector indicators, US$ million unless stated (MEF Panorama Macroeconómico, July 2026, Indicadores Económicos, with BCP data to 19 August 2026; preliminary, 2025 current account per MEF IFP 2026)

IndicatorValuePeriod
Total exportsUS$16,934.6 million, +7.1%2025
Trade balanceUS$1,176 million deficit2025
Goods balance (balance of payments)US$1,795 million deficit (2024: US$1,153 million)2025
Exports+25.1% year on yearFirst half 2026
Maquila exportsUS$716.7 million, +29.6%First half 2026
Imports+9.2% year on yearFirst half 2026
Trade balanceUS$746.6 million surplusFirst half 2026
Net international reservesUS$11,697.9 millionJuly 2026 (MEF Panorama)

Recent trade momentum (MEF, IFP 2026, section 1.2.5, BCP data)

Worked example

  • Dividend out. A Paraguayan subsidiary can buy dollars in the free market and remit a dividend without BCP approval (Ley Nº 117/91 art. 6); the cost is the dividend tax and withholding, covered in taxes/dividend-tax-idu and fx/dividends-and-profit-repatriation.
  • Exporter's margin. A soy or beef exporter earning US$1,000,000 converted PYG 7,545,000,000 at the 2025 average rate but only PYG 5,868,310,000 at the 28 October 2026 BCP rate, about 22 percent fewer guaraníes to cover local costs. Hedge or match currency where possible.
  • Argentina link. Paraguay trades with Argentina through Mercosur and shares the Yacyretá dam. At the BCP's 28 October 2026 rate of PYG 3.82 per Argentine peso, ARS 1,000,000 is about PYG 3,820,000 (about US$651). For Argentine FX, export duty and tax rules see the Argentine guide; this page covers only Paraguay.

Step by step

  1. 1. Check that your activity has no sector restriction (Ley Nº 117/91 art. 2 allows limits only by law); see investing/foreign-investment-regime-and-incentives.
  2. 2. Plan currency: export revenue is mostly dollars, local costs in guaraníes. Use the BCP daily reference rate for budgeting and track it at /dashboard/.
  3. 3. Use maquila, free zones or Mercosur origin rules where they fit: trade/maquila, trade/free-zones and trade/mercosur-and-trade-agreements.
  4. 4. For electricity intensive projects, read sectors/energy-mining-and-key-sectors on how Itaipú and Yacyretá energy reaches the domestic grid.
  5. 5. Read the BCP balance of payments and the MEF's monthly Panorama Macroeconómico for trade and reserve data; figures are preliminary and revised.
  6. 6. For Argentina interactions (trade, FX, double taxation), check Paraguay's treaty list in taxes/tax-treaties and the Argentine side in the Argentine guide.

Common traps

  • Reading free FX as tax free. Ley Nº 117/91 art. 6 guarantees free remittance but says all transfers are subject to the taxes set by law.
  • Using stale current account figures. Preliminary 2025 BCP data have been revised several times in 2026; the MEF's October 2026 report puts the 2025 deficit at 2.8 percent of GDP.
  • Comparing exports across sources. Customs registered exports (US$16,934.6 million in 2025 including re exports) and national accounts exports of goods and services (US$13,745.59 million in the Panorama table) measure different things.
  • Assuming dam revenue is stable. Itaipú and Yacyretá payments depend on rainfall, generation, domestic use and the exchange rate; fiscal revenue from them fell 25.8 percent in 2025.
  • Pricing in old exchange rates. The guaraní was about 15 percent stronger in the first half of 2026 than the 2025 average; local costs in dollars are higher than many 2025 business plans assumed.

Sources

Related pages

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X

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