Paraguay Beef Eyes a Bigger US Quota as the IMF Praises the Economy

PARAGUAY · ECONOMY

The IMF has given Paraguay one of its warmest reviews in years, just as Washington opens its beef market a little wider. The government in Asunción says it is ready to take advantage of both.

What the IMF actually said

The International Monetary Fund closed its annual health check of the Paraguayan economy on Friday 28 August. The formal name is the Article IV consultation, a review every member country gets.

The verdict was unusually warm. The fund said Paraguay has recorded strong macroeconomic results, with growth of 6.6% in 2025 and 5.8% year on year in the first half of 2026.

Inflation is under control and heading for the central bank’s target of 3.5% this year. Foreign reserves sit above the levels the IMF considers adequate, and the fund judges the risks to the outlook as balanced.

The praise comes with homework. The IMF wants the fiscal deficit cut to 1.5% of gross domestic product in 2026, which would restore compliance with Paraguay’s own Fiscal Responsibility Law for the first time since 2018.

The reforms the fund wants faster

Paraguay runs two standing agreements with the IMF. The Policy Coordination Instrument, or PCI, monitors economic reforms, and the Resilience and Sustainability Facility, or RSF, supports climate-related ones.

Neither lends money, but both act as a seal of discipline that investors watch. Paraguay is one of the few countries in the region carrying both.

The fund’s wish list is specific. It wants better tax collection through the national revenue agency, a fix for the public pension system known as the Caja Fiscal, and a faster pace of civil-service and capital-market reform.

The market has already rewarded the effort. Moody’s grants Paraguay an investment-grade credit rating, and S&P has put its outlook at positive.

The US beef door opens, a little

The second piece of news arrived from Washington. The United States has exempted beef from Brazil and Paraguay from its new round of tariffs, while leaving Argentina and Uruguay subject to them.

For Paraguay beef, that is a competitive gift. The country shipped 12,111 tonnes to the United States in the first quarter alone, worth US$65.7 million, according to the national animal-health agency Senacsa.

The limit is the quota system. Paraguay beef enters under a shared 52,005-tonne quota pooled with Brazil, Ireland, Japan and Lithuania, and that pool was already full by early February.

Outside the quota, exporters pay a 26.4% tariff. Inside it, they pay just 4.4 US cents per kilogram, which is why a quota of its own is the industry’s great goal.

Why Asunción thinks it can win one

Paraguay’s argument is diplomatic as much as commercial. It is one of Washington’s closest allies in South America, and unlike its Mercosur neighbours it does not sell beef to China.

Industry leaders say a country quota would be a concrete signal of that relationship. Every other Mercosur member already has, or is negotiating, preferential access of some kind.

The sector has room to grow. Ranchers say better access would raise profitability along the whole chain and expand production, which would also steady domestic supply.

The strong guaraní complicates the party

One headwind is homemade. The guaraní has climbed to its strongest level against the dollar since 2018, which squeezes what exporters earn in local currency.

Manufacturers and farmers have pressed the central bank over the exchange rate. The IMF, for its part, treats the flexible currency as a shock absorber worth keeping.

For foreign investors, the combination is still attractive. A stable currency, investment-grade credit and a fresh US opening for Paraguay beef rarely arrive in the same week.

What to watch from here

The first test is the 2026 budget, now moving through Congress. It must deliver the 1.5% deficit the IMF has pencilled in.

The second is Washington. If the tariff exemption turns into a quota of Paraguay’s own, the beef industry gains a premium market at the exact moment rival suppliers are locked out.

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