Paraguay Economic Conditions

Economics and society

The most important economic activities in the country are the agricultural industry and cattle farming. The country’s most important export products are soybeans, cotton and meat.

Most of Paraguay’s population is of productive age (between 15 and 64 years). For every person of retirement age, there are 2 people able to work. Life expectancy in Paraguay is around 73 years.

Although direct foreign investment has led to economic growth, this is not reflected in the living conditions of the population. Inequality is wide and access to welfare and social services is very limited.

A large proportion of the population has not completed more than primary school, about 6 out of 10 Paraguayans have not completed secondary school. The education budget is below 7% of GDP and there is no real research and higher education policy.

Along with Spanish, Guarani is Paraguay’s official language. Despite this, the country’s indigenous people are very marginalized. All the Guarani indigenous people who lived in the territories now belonging to the Itaipu hydroelectric plant were displaced from their land. This situation shows the worrying condition of the indigenous people of Paraguay.

Important political parties

– Republican National Association. Very conservative party that inherited power after the dictatorship.

-Liberal Radical Authentic Party (formerly the Liberal Party). With great emphasis on working classes, this is a centerpiece.

– Other political parties or alliances

Massive deforestation

In the spring of 2014, the University of Maryland published a study showing that Paraguayan Chaco was the area in the world with the fastest deforestation. The satellite images clearly show how the forest has been replaced with hundreds of square grazing areas for cattle. For the last three years, 1100 hectares of forest have been lost every month from Paraguayan Chaco, and with this rate the forest will be completely wiped out in 25 years.

The legislation in Paraguay is clear on both indigenous rights and environmental protection, but in practice these laws are practiced to a very small extent. In October 2013, Horacio Cartes even signed Decree 453 which eases the requirement for environmental licenses, which in practice allows for increased deforestation. The agricultural lobby is powerful in Paraguay, and everything indicates that they will have good living conditions under Horacio Cartes.

Indigenous situation

According to, Paraguay’s 19 indigenous groups are very critical of the agricultural industry that has displaced them from their original habitats. Genetically modified soy has displaced the diversity that existed in the past. Barbed wire fences and private property signs meet the Indians where they could previously move freely. Drinking water has been contaminated by chemicals from agriculture, and some communities have experienced an increase in the number of fetal malformations.

In Paraguay, one third of the population is poor (living for less than two dollars a day), and many indigenous peoples fall into the category of extremely poor (living for less than one dollar a day). Indigenous people score lowest on all social indicators such as child mortality, illiteracy and life expectancy. The loss of the earth has changed the way of life altogether, and many have not coped with the transition from a nomadic lifestyle to being permanent day laborers in central areas. Weathering cultural identity, alcoholism and high suicide rates are affecting more and more indigenous communities.


Capital: Asunción
Population: 6.9 million (2016)
Life expectancy: 77.1 (2016)
Infant mortality: 19.4 per 1000 (2016)
Religion: Catholicism 89.6%, Protestantism 6.2%, other 4% (2002))
Official languages: Spanish and Guaraní
GDP per capita (PPP): $ 9,400 (2016)
Currency unit: Guaraní
Main export items: Soybeans, animal feed, cotton, meat, cooking oil, wood, leather.
Regional relations: CELAC, Mercosur, OAS, UNASUR and the Pacific Alliance (observer).