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South America and South Atlantic Islands
Paraguay |
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Last updated: 5 January 2009 |
Country information
ECONOMY
Basic Economic Facts
GDP: US$ 9.1 billion (2006)
GDP per head: US$1,9 (2007 projected)
GDP per head (purchasing power parity): $ 7.04
Annual Growth: 3.2%
Inflation: 5% (2007)
Major exports: Electricity, charcoal, soya and its derivatives, cotton, timber, oilseeds, coffee, orange juice, tobacco, meat, fruit, peel and nuts, organic sugar, leather, rum, pet food, crafts, mineral water, dairy produce.
Major imports: Petroleum, machinery, transportation equipment, metal and metal products, foodstuffs, alcoholic beverages, dairy and other edible animal products, and cocoa derivatives.
Major trading partners: Brazil, Argentina, Uruguay, Chile, United States and China.
Bilateral donors: United States, Japan, Taiwan, Germany, Spain and France.
Multilateral assistance: EU, IDB, UNDP, and World Bank.
Paraguay exports to: Brazil, Argentina, Uruguay, Chile, United States, The Netherlands.
Paraguay imports from: Brazil, Argentina, United States, Japan, South Korea, Hong Kong and United Kingdom.
Exchange rate: £1 = PYG7,910 (August 2008)
Agriculture is the predominant industry contributing just over 20% of Gross Domestic Product (GDP). Leading agricultural products are soya bean, cassava, cotton, sugarcane, corn, wheat, root crops and fruits. Livestock breeding is a major agricultural occupation (cattle, horses, pigs, goats and sheep). Forestry is very important. Forest products include timber, tannin and petitgrain oil (perfume base). Manufacturing is confined largely to agricultural and forestry products and to basic consumer goods. Other important products are processed meat and other foodstuffs, textiles, wood products and chemicals. Private investment into the services sector, particularly telecommunications, has risen is recent years.
Oil and gas exploration is attracting increasing volumes of (mainly British) finance and could become a significant contributor to Paraguay's economy in the future.
Paraguay is a market economy with a large informal sector. Up until 2002, the economy had been shrinking due to political instability and stagnation. This was partly caused by the knock-on effect of the declining Brazilian and Argentine economies in the late 90s. But, since the 2002 financial crisis and the implementation of economic reforms, growth has improved significantly. It was at almost twice its long term average in 2007. Poverty is still high but per capita income has increased to its highest level for 8 years. Extreme poverty has reduced by a third. Public finances have improved mainly because of higher tax collection, supported by a 2004 tax reform. Strict implementation of a 2004 financial plan has kept public expenditure under control.
