Currency shifts impact real estate in Paraguay and exports in Uruguay

Currency fluctuations in Paraguay and Uruguay are creating economic challenges for local industries. In Paraguay, the depreciation of the US dollar against the guaraní is impacting the real estate sector. Raúl Constantino, president of the Paraguayan Chamber of Real Estate Developers (CAPADEI), noted that while approximately 90% of construction costs are paid in local currency, many sales and contracts are conducted in dollars. This mismatch, combined with rising internal costs, is eroding profit margins and forcing developers to increase dollar-denominated prices for new projects.

In Uruguay, the Rural Federation has warned of a “permanent imbalance” caused by the strengthening of the peso against the dollar. The organization stated that the exchange rate lag acts as an implicit subsidy for imported goods while increasing production costs for exporters. According to the federation, the purchasing power of a dollar in Uruguay has dropped significantly since 2022, reducing the competitiveness of the productive sector and making it harder for exporters to manage poor harvests or debt.