Paraguay’s Unemployment Rate Hits Eight-Year Low as Formal Jobs Expand

Paraguay’s unemployment rate dropped to 5.6% in the first quarter of 2025, marking the lowest level since 2017, Labor Minister Mónica Recalde announced on Tuesday.

This significant improvement reflects a year-over-year reduction of more than 41,000 unemployed individuals across the South American nation.

The latest data from the National Statistics Institute (INE) reveals substantial employment growth in key sectors. The service industry and agricultural sector led job creation, while formal non-agricultural employment expanded with over 35,000 new positions.

Private sector employment grew by more than 43,000 workers, indicating a sustained trend toward employment formalization. Paraguay’s total employed population reached 2.91 million people, up from 2.87 million in the same period of 2024.

Female employment showed notable improvement, especially in rural areas. The workforce now includes approximately 3.08 million people, representing 70% of the population aged 15 and over.

The government’s “Hunger Zero” program generated over 18,000 formal jobs in education and school feeding sectors. Social security coverage has expanded to approximately 778,000 registered workers, though labor informality remains high at nearly 62% of the working population.

Paraguay Celebrates Job Creation Milestone

President Santiago Peña previously celebrated the creation of over 96,000 new jobs since the start of his administration. “In one year and four months of governance, we have created 100,000 new jobs in Paraguay, and I will not rest until we reach 500,000,” Peña stated during a recent ceremony.

The country’s employment growth occurs within broader economic development initiatives. Paraguay is implementing a National Employment Plan and Formalization Strategy with support from international organizations like the ILO, UNDP, and UNICEF.

Despite these positive trends, challenges persist. Subemployment increased slightly to 3.1%, affecting nearly 97,000 workers. The combined rate of unemployment and subemployment represents 8.7% of the workforce, though this has decreased from 9.8% in early 2024.

Minister Recalde emphasized that the government’s priority remains “strengthening formal employment, with a focus on inclusion and sustainability of decent work at the national level.”