Paraguay’s Economy: Agriculture, Informal Sector, Hydropower & More

Economic Structure Overview

Paraguay’s economy relies heavily on agriculture and a large informal sector, with modest industrialization. Services now account for about half of GDP.

1. Agriculture (~18% of GDP)

• Major crops: soybeans, corn, wheat, cassava, sugarcane.
• Beef exports: high‑quality, pasture‑raised.

2. Informal Economy (~35% of GDP)

Street vending, small‑scale trade, and unregistered services dominate this sector.

3. Hydropower Generation

Itaipú and Yacyretá dams on the Paraná River supply domestic needs and export electricity to Argentina and Brazil, generating significant revenue.

4. Manufacturing (~17% of GDP)

Food processing, beverages, textiles, cement, chemicals, automotive assembly. Recent efforts target foreign investment.

5. Services & Tourism (~51% of GDP)

Retail, transport, finance, telecom, and growing tourism.

6. Exports & Remittances

Key exports: agricultural products, beef, electricity. Remittances from Paraguayans abroad bolster foreign reserves.

Vulnerabilities

Commodity price swings, weather impacts on crops, and regional economic shifts pose risks.