Economy of Paraguay
Template:*Paraguay* has a market economy
characterized by a large informal sector.
Agriculture dominates the economy. In re-
cent years, the economy has grown as a res-
ult of increased agricultural exports, espe-
cially soybeans. Reforms in fiscal and monet-
ary policy also have improved Paraguay’s
economy. Inflation has dropped, and the cur-
rency has appreciated gradually. Neverthe-
less, urban unemployment and underemploy-
ment
have been problems
throughout
Paraguay’s history.
main export goods, 2007-2008, source :
Paraguay Ministry of Industry and Commerce
/ Riedex
Paraguay has the economic advantages of
a young population and vast hydroelectric
power but has few mineral resources, and
political instability has undercut some of the
economic advantages present. The govern-
ment welcomes foreign investment.
Structure of the economy
The most
important component of
the
Paraguayan economy is the farming sector,
which contributed 27% to GDP in 2006. The
participation of commerce was 20.2%, and
that of other services, including government,
38.4%. Industry’s part (including mining and
construction) was about 20%. Most enter-
prises are small, micro and individual ones,
including
subsistence
jobs
like
street
vendors. Only 4% of the Paraguayan labor
force works in companies with more than 50
employees.
After years of economic crisis, between 1999
and 2002, the Paraguayan economy grew at
between 2.9 and 4.1% per year from 2003 to
2006. Inflation in 2007 reached 6.0%. GDP
grew 5,8% in 2008, fastest growing sector
being agriculture with 10,5% growth[1]
In June 2007 external foreign exchange
reserves amounted to US$ 2153 million, and
the foreign official debt US$ 2154 million,
close to parity.
Fiscal surplus is provisionally reported as
0.5% of GDP in 2006 and 2007.
agriculture, lifestock and
forestry
Traditionally, the Paraguayan economy is
based on cattle livestock and the cultivation
of manioc, sugar cane, cotton, soy and yerba
mate. During the last years, soy has become
the principal product of Par