Fitch maintains Paraguay’s BB+ rating despite strong growth

Fitch Ratings has maintained Paraguay’s sovereign credit rating at ‘BB+’ with a positive outlook, keeping the nation one notch below investment grade. While the agency acknowledged strong economic growth—with real GDP growing 6.6% in 2025—and macroeconomic stability, it cited significant concerns regarding fiscal credibility, institutional weakness, the rule of law, and high levels of corruption.

Economists have noted that the rating highlights a lack of fiscal credibility, specifically pointing to a USD 1.3 billion backlog in payments to suppliers. This debt, which exceeds the fiscal deficit, poses a risk to fiscal consolidation. There is skepticism regarding the government's ability to return to a 2% fiscal deficit by 2028, especially as the country has repeatedly failed to comply with the Fiscal Responsibility Law.

Fitch remains the only one of the three major rating agencies to keep Paraguay below investment grade; Moody’s upgraded the country to Baa3 in July 2024, and S&P Global Ratings raised its rating to BBB- in December 2025. President Santiago Peña highlighted the positive outlook as a favorable signal for potential future upgrades.