Paraguay’s June Inflation Hits 0% as Food Prices Drop, Economy Holds Steady

Paraguay’s inflation rate stood at 0% in June 2025, according to the Central Bank of Paraguay. This rare pause in price increases happened because the cost of fruits and vegetables fell sharply, balancing out rising prices in other areas.

The annual inflation rate rose slightly to 4.0% in June from 3.6% in May, ending a short period of slower price growth. Food makes up about a third of Paraguay’s consumer price index.

In June, prices for bananas, carrots, and tomatoes dropped by double digits. These declines helped keep the overall inflation rate flat for the month, even as fuel and clothing became more expensive.

Gasoline prices rose by more than 5%, and diesel went up by over 3%. Clothing and some services also saw moderate price increases. The Central Bank has kept its main interest rate unchanged at 6% for 15 months.

Officials say stable prices and steady economic growth support this decision. They expect inflation to stay close to 3.5% to 3.8% for the rest of 2025, as long as food and energy prices remain under control.

Paraguay’s economy continues to grow. Official data shows gross domestic product expanded by 5.9% in the first quarter of 2025, outpacing last year’s growth. Construction led the way, growing nearly 13% due to more building projects.

Livestock, forestry, fishing, and mining activities increased by almost 11%. Electricity generation rose by over 8%, helped by higher output from the country’s major hydroelectric plants.

Despite these gains, agriculture performed below expectations, which held back even stronger economic growth. Still, the Central Bank expects the economy to grow by about 4% for the year, with construction, services, and energy as key drivers.

Stable inflation helps protect the value of people’s money. Economic growth creates jobs and new business opportunities. However, food prices have risen more than 80% over the past decade, making the cost of living a challenge for many families.

Paraguay’s experience in June 2025 shows how swings in food prices can shape the country’s inflation and affect daily life.