Paraguay fiscal stability questioned over 2027 budget projections

Economists and former officials are raising concerns regarding the sustainability of Paraguay’s public finances and the accuracy of the 2027 National General Budget (PGN) projections.

Economist Manuel Ferreira has questioned the government's use of an official exchange rate of 6,458 Guaraníes per dollar for the upcoming budget. He argues this is an “accounting artifice” designed to mask a larger fiscal deficit. Ferreira suggests that using current market rates would reveal a deficit exceeding 4.2% to 4.3% of GDP, rather than the projected 3.9%. He also noted that US economic policy under the Trump administration may favor a lower dollar, making the government's high exchange rate projection unlikely.

Former Finance Minister César Barreto also warned of fiscal instability, alleging that the government has obscured significant debt owed to pharmaceutical companies and construction firms. Barreto claims this lack of transparency resulted in a real fiscal deficit of approximately 4% of GDP and led to inaccurate economic growth projections. He further criticized the plan to issue USD 800 million in bonds to cover recurrent current expenses, such as medicine, arguing that long-term debt should not be used for routine purchases.