Santiago Peña took office on 15 August 2023, which makes today the three-year mark of his presidency. Both versions of the balance sheet landed yesterday: the government's, and a considerably less comfortable one from the economists and the central bank's own survey data.
What the Government Puts on the Board
The official figures are strong, and they are not spin. Paraguay has grown above 4% for three consecutive years: about 4.7% across 2023 and 2024, 6.6% in 2025, with roughly 4.5% projected for 2026. Last year's rate was around triple the regional average.
Poverty fell from 24% to 16%, and Peña has pointed out that Chile took a decade and Uruguay five years for a comparable drop. His government counts 242,000 jobs created. Inflation came down from 8.1% in 2022 to 1.6% in July 2026.
"Paraguay grows in a region where nobody grows," as he put it. On the macro numbers, that is defensible.
What the Same Three Years Look Like in a Household
The counter-analysis published by ABC Color on 14 August uses the same period and reaches a different place, and it is worth reading precisely because it does not dispute the growth.
Cumulative inflation over the three years was about 12% — but food rose 25%, beef 40%, vegetables 37% and fruit 25%. The average is not what people buy.
61.6% of workers, around 1.75 million people, are in informal employment. Household debt climbed 30%, and about 50% among lower-income families. Monetary poverty at 16% still leaves 985,000 people below the line, and the fall is attributed largely to state social programs rather than wages.
The jobs figure carries an asterisk too: 242,000 is roughly halfway to the government's own 500,000 target, and the statistics institute recorded 118,000 of them in 2025 alone.
The clearest signal is the central bank's consumer confidence index, which sits in pessimism territory despite three years of growth. Osvaldo Serafini, president of the banking association ASOBAN, put the gap plainly: investment grade is not "a passport to prosperity."
The Number That Matters for the Tax Question
For this site's readers, one part of the discussion outranks the rest. On 13 August two former finance ministers, Manuel Ferreira and Benigno López, set out where the fiscal path is heading.
Ferreira warned that concealing part of the deficit damages the state's credibility, since "the base of credibility is trust." He argued the fiscal rule dating from 2013, with its 1.5%-of-GDP ceiling, may no longer be realistic, and cautioned against using public investment as the adjustment variable. López was blunter about the pace: "we unfortunately act by reaction."
The figures cited in that discussion are the ones to write down: US$1.27 billion in unrecognized debt to suppliers, and deficit projections of 3.2% for 2026 and 3.9% for 2027. Treat those as projections raised in a debate rather than settled official numbers, and note they sit on a different basis from the 1.2%-of-GDP half-year figure in our earlier deficit report.
This is the variable that decides the question people actually ask us. Paraguay's territorial system is structural rather than an incentive scheme, and changing it needs Congress and a new law, which is why we argued in whether the 0% will last that the realistic risk is reinterpretation rather than abolition. A widening deficit is what would eventually put any of it on the table.
What It Means if You Are Weighing Paraguay
Three things follow, and none of them is a reason to change plans.
The macro case that draws people here is real. Growth, an investment-grade rating and low headline inflation are not marketing, and they are the backdrop against which residency and structure decisions get made.
The cost picture deserves more care than the headline suggests. Food up 25% in three years, against a guaraní that has strengthened sharply against the dollar, means someone earning abroad has lost ground twice over. The figures in our cost of living guide hold today and should be treated as a floor rather than a fixed ceiling.
And the fiscal line is the one to watch, not the growth line. The government has repeatedly ruled out raising taxes and is betting on collection instead, which is the pattern behind e-invoicing and the bank data exchange. That bet holding is what keeps the current model intact.
US citizens and green-card holders: Paraguay's fiscal debate does not touch your position either way. The United States taxes worldwide income on the basis of citizenship, so your filings continue regardless of what Asunción decides about its own budget. Take advice from a US-qualified professional.
Frequently Asked Questions About Paraguay's Economy Under Peña
How much has Paraguay's economy grown under Peña?
Above 4% for three consecutive years: roughly 4.7% across 2023 and 2024, 6.6% in 2025 and about 4.5% projected for 2026. The 2025 rate was around triple the regional average, and it came alongside inflation falling from 8.1% in 2022 to 1.6% in July 2026.
Is life in Paraguay actually getting cheaper?
Not in the basket most people buy. Cumulative inflation ran near 12% over three years while food rose 25%, beef 40% and vegetables 37%. Consumer confidence remains in pessimism territory despite the growth, and household debt is up about 30%.
Does the deficit put Paraguay's 0% tax on foreign income at risk?
Not in the near term, and not by itself. The territorial rule is structural rather than an incentive program, so changing it requires Congress and a new law. The realistic risk is administrative reinterpretation, which is why the deficit trend is worth watching even though nothing has been proposed.
Weighing Paraguay while the fiscal debate runs? The question worth answering is which parts of your plan depend on rules that could be reinterpreted, and which do not. Get in touch.
Disclaimer: This article is general information, not tax, legal or investment advice. Economic figures are as reported and projections are contested by the people who cite them. Confirm current data with the BCP, the finance ministry or a qualified adviser before acting.
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About the author
Yannick Schroth
Founder · Paraguay relocation advisor
Lives in Asunción and guides international nomads, entrepreneurs and investors toward residency, a cédula and a tax-efficient structure in Paraguay.
