Paraguay faces budget pressure as fixed costs reach 70%

In Paraguay, public finances are facing significant pressure due to budget rigidity. Salaries, pensions, and debt servicing currently account for nearly 70% of the Central Administration's budget.

Between January and July, funding for these primary components reached G. 36.95 trillion, a 4.3% increase compared to the same period in the previous year. Specifically, spending on personal services and pensions saw a notable rise, with pension costs increasing by 11.5% to G. 5.59 trillion. While debt service payments decreased by 10.3% year-on-year, they remain a substantial burden on state accounts. This high level of committed spending limits the government's ability to reallocate resources to other priorities or respond to new needs.