Paraguay Poverty Falls to 16% as 6% GDP Growth Powers Record Employment
Key Points
— Paraguay’s poverty rate fell to 16% in 2025, down 3.6 percentage points, with over 213,000 people crossing above the poverty line
— Extreme poverty hit a historic low of 2.4%, while unemployment fell to a record 3.6% — both driven by 6% GDP growth and 242,000 new jobs over two and a half years
— Rural poverty dropped from 26.3% to 22.1%, reflecting stronger agricultural output and expanded government social programs
Record Lows Across the Board
Paraguay poverty fell to 16% in 2025 — a 3.6 percentage point decline that lifted over 213,000 people above the poverty threshold, according to government data released this week. Extreme poverty dropped to 2.4%, the lowest level ever recorded in the country, with more than 81,000 people exiting that category.
The results position Paraguay as one of Latin America’s strongest social performers in a year when Argentina’s poverty fell to 28.2% and Colombia and Brazil continued to struggle with structural inequality. At 16%, Paraguay’s poverty rate is now roughly half of Argentina’s and well below regional averages.
Jobs and Growth Did the Heavy Lifting
The improvement was driven primarily by employment creation and economic expansion. Paraguay created approximately 242,000 new jobs over the past two and a half years, pushing the unemployment rate to a record low of 3.6%. GDP growth of 6% in 2025 — the fastest in South America — powered activity in high-employment sectors and translated directly into higher household incomes.
Social programs complemented the labor market gains. The Tekoporã Mbareté conditional transfer program raised benefits by 25% and now reaches nearly 195,000 families. Elderly pensions cover more than 360,000 people, and the Hambre Cero en las Escuelas school meals program achieved full national coverage, serving over one million students.
Rural Gains
The rural sector, historically Paraguay‘s weakest, showed the most pronounced improvement. Rural poverty fell from 26.3% to 22.1%, a decline of approximately 78,000 people. Extreme rural poverty also dropped significantly, reflecting stronger agricultural production and increased government presence in remote areas.
Paraguay’s agricultural economy — anchored by soybean and beef exports — benefited from favorable commodity prices and expanded production in 2025, providing a foundation that urban service economies in other LATAM countries could not match.
The Regional Picture
Paraguay’s results stand out in a region where poverty reduction has been uneven. Argentina’s drop from 52.9% to 28.2% under Milei was dramatic but started from a crisis spike. Brazil’s labor market is decelerating under high interest rates, and Colombia faces rising debt and institutional turmoil.
Paraguay’s quieter success — built on sustained growth, low unemployment, and expanding social coverage — offers a different model: less dramatic, but arguably more durable.
Deep Dive
For the complete picture, read our in-depth guide: Paraguay: Washington's Most Valued Ally in Latin America
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