Paraguay: Economy
The World Factbook 1993: Paraguay Economy

Overview: Agriculture, including forestry, accounts for about 25% of GDP, employs about 45% of the labor force, and provides the bulk of exports. Paraguay lacks substantial mineral or petroleum resources but does have a large hydropower potential. Since 1981 economic performance has declined compared with the boom period of 1976-81, when real GDP grew at an average annual rate of nearly 11%. During the period 1982-86 real GDP fell in three of five years, inflation jumped to an annual rate of 32%, and foreign debt rose. Factors responsible for the erratic behavior of the economy were the completion of the Itaipu hydroelectric dam, bad weather for crops, and weak international commodity prices for agricultural exports. In 1987 the economy experienced a minor recovery because of improved weather conditions and stronger international prices for key agricultural exports. The recovery continued through 1990, on the strength of bumper crops in 1988-89. In a major step to increase its economic activity in the region, Paraguay in March 1991 joined the Southern Cone Common Market (MERCOSUR), which includes Brazil, Argentina, and Uruguay. In 1992, the government, through an unorthodox approach, reduced external debt with both commercial and official creditors by purchasing a sizable amount of the delinquent commercial debt in the secondary market at a substantial discount. The government had paid 100% of remaining official debt arrears to the US, Germany, France, and Spain. All commercial debt arrears have been rescheduled. For the long run, the government must press forward with general, market-oriented economic reforms.

National product: GDP - exchange rate conversion - $7.3 billion (1992 est.)

National product real growth rate: 1.7% (1992 est.)

National product per capita: $1,500 (1992 est.)

Inflation rate (consumer prices): 20% (1992 est.)

Unemployment rate: 10% (1992 est.)

Budget: revenues $1.2 billion; expenditures $1.2 billion, including capital expenditures of $487 million (1991)

Exports: $719 million (f.o.b., 1992) commodities: cotton, soybean, timber, vegetable oils, coffee, tung oil, meat products partners: EC 37%, Brazil 25%, Argentina 10%, Chile 6%, US 6% Imports: $1.33 billion (c.i.f., 1992) commodities: capital goods 35%, consumer goods 20%, fuels and lubricants 19%, raw materials 16%, foodstuffs, beverages, and tobacco 10% partners: Brazil 30%, EC 20%, US 18%, Argentina 8%, Japan 7%

External debt: $1.2 billion (1992 est.)

Industrial production: growth rate 5.9% (1989 est.); accounts for 17% of GDP

Electricity: 5,257,000 kW capacity; 16,200 million kWh produced, 3,280 kWh per capita (1992)

Industries: meat packing, oilseed crushing, milling, brewing, textiles, other light consumer goods, cement, construction

Agriculture: accounts for 25% of GDP and 44% of labor force; cash crops - cotton, sugarcane; other crops - corn, wheat, tobacco, soybeans, cassava, fruits, vegetables; animal products - beef, pork, eggs, milk; surplus producer of timber; self-sufficient in most foods

Illicit drugs: illicit producer of cannabis for the international drug trade; important transshipment point for Bolivian cocaine headed for the US and Europe

Economic aid: US commitments, including Ex-Im (FY70-89), $172 million; Western (non-US) countries, ODA and OOF bilateral commitments (1970-89), $1.1 billion

Currency: 1 guarani (G)=100 centimos

Exchange rates: guaranies (G) per US$ - 1,637.6 (January 1993), 1,500.3 (1992), 447.5 (March 1992), 1,325.2 (1991), 1,229.8 (1990), 1,056.2 (1989), 550.00 (fixed rate 1986-February 1989)

Fiscal year: calendar year