Beyond Soy And Beef, Paraguay Tries To Prove It Can Grow On Investment

Key Points

1. The central bank expects growth near 6% in 2025, cooling to 4.2% in 2026, with inflation around the mid-3% range.
2. Officials say the engine is shifting from harvest-led swings to investment, industry, and services.
3. Investment-grade status and new projects help the case, but the boom must show up in paychecks.

Paraguay’s latest headline is simple: a strong 2025, then a slower 2026. Central bank president Carlos Carvallo says GDP should rise about 6% this year and 4.2% next year. He forecasts inflation of 3.6% in 2025 and 3.5% in 2026. That matters for planning.

The story behind the numbers is more unusual. Paraguay is often summarized abroad as soy, beef, and hydropower. It is commonly described as the world’s sixth-largest soy producer and a major beef exporter. Those sectors still matter.

But Carvallo argues growth is broadening. He points to industry and services, and to a demand picture led by investment rather than a consumption boom. He says the primary, secondary, and tertiary sectors all expanded above 5%.

Inflation is the credibility test. Paraguay grew 4.7% in 2024 and ended that year with 3.8% inflation. Carvallo acknowledges food pressures, especially higher beef prices, but calls them temporary and says they did not change the wider index.

The IMF has also said expectations remain anchored close to the central bank’s 3.5% target. There are examples of the “new base.” The maquila export-manufacturing program reported record activity in 2025, citing export growth and job creation.

JBS announced a $70 million poultry investment plan, with a goal of roughly 1,100 jobs at full capacity. This does not erase commodity risk, but it diversifies it. Why should outsiders care?

Paraguay feeds global food chains, exports power, and is trying to move up the value ladder without losing macro discipline. Moody’s upgrade to investment grade (Baa3) in July 2024 strengthened that narrative.

It can also lower borrowing costs over time. The harder question is whether a cooling 2026 turns the debate from forecasts to living standards—and whether the model holds when the cycle turns.