Economy of Paraguay
The economy of Paraguay is marked by the dominance of the farming, the commercial and the service sectors. The industry although is less developed, and almost based on the processing of agriculture goods.
The commercial sector is supported by buying tourism proceeding from Brazil and Argentina, as several imported products are cheaper than in the neighboring countries.
Paraguay figures as MERCOSUR foundation member.
Contents |
Structure of the economy
The most important component of the Paraguayan economy is the farming sector, which contributes 27% to GDP, en 2006. The participation of commerce is 20.2% and other services, including government, 38.4%. The industry’s part (including mining and construction) is about 20%.
After years of economical crisis, between 1999 and 2002, Paraguayan economy has grown between 2.9 and 4.1 per year, from 2003 to 2006. For 2007, the estimated growth is about 6.4%. The inflation, in 2007 achieved 6.0%.
Most of enterprises are small, micro and individual enterprises, including subsistence jobs like street vendors. Only 4% of Paraguayan labor force works in companies with more than 50 employees.
In June 2007, external foreign exchange reserves achieved US$ 2153 billion, and the foreign official debt, US$ 2154 billion, close parity.
Fiscal surplus achieved 0.5% of GDP, in 2006 and 2007.
Agriculture and livestock
Traditionally, the Paraguayan economy is bases on cattle livestock and the cultivating of manioc, sugar cane, cotton, soy and yerba mate. During the last years, soy became the principal product of Paraguayan agriculture, and the main export product of the country. The increase of soy production contributed to important structural changes in the rural zones of Paraguay, as like the reduction of agriculture jobs and the stronger mechanization of cultivating processes.
In the same time, products like fruits, wheat and organic sugar reached external markets and contributed to a higher diversification of Paraguayan primary sector.
The livestock sector prospered after the closing of other meat producing countries lose their markets after appearance foot and mouth disease, while Paraguay maintained free of it. Nowadays, Argentina and Brazil recovered their markets, which increase competition for Paraguayan meat.
The timber production in Paraguay get reduced after disappearance of wide parts of the original forests, however, sustainable wood cultivating increases.
Mining
Paraguay’s got few mineral resources. The principal exploitations are made with lime for construction and cement industry. There are some gas and oil resources in the northern Chaco region, which are not exploited yet.
Industry
Traditionally, the industrial sector of Paraguay depends on agriculture, as like bakeries, processing of drinks, tannery and cabinetmaking. Other important industries cover the sectors of textile, leatherwear, footwear, ceramic and construction materials.
During last years, several new industries came up, as like pharmaceutical production, motorcycles assembling or electrical machines.
The Maquila System, which was established in 1997 and allows the realization of industrial procedures with low tax cost, for products to be exported, became important after 2004, with several national and international factories operating by this system.
Electrical energy
The electrical energy consumption is covered virtually by 100% from the hydro electrical dams of Itaipu, Yacyreta and Acaray, which is the oldest and smallest of these three plants. The most of energy produced by Itaipu is sold to Brazil, as same as Yacyreta energy is sold to Argentina.
External trade
The most important export products of Paraguay are soybeans, meat, corn, animal feed, and vegetable oils. In return, Paraguay imports industrialized goods as like machines, electrical products, vehicles and chemical products. Also, petroleum is a main import good of the country. Uruguay, Brazil and Russia are the main export markets of Paraguay, while the most important providers are China and Brazil. In 2007, exports achieved US$ 3.4 billion, and imports US$ 6.2 billion.
Informal sector
Traditionally, the informal sector takes an important part of the Paraguayan economy. Specially, this sector achieved high turnovers by the informal import and re-export of several goods, like electric appliance, tobaccos, Whiskies, etc. During the last years, this business is pressurized by stronger checks of the Brazilian customs authorities, and by pretensions of Paraguay’s government to achieve a higher tax coverage.
The non-registered individual workers and vendors still form an important part of Paraguayan labor force.
Transport
The Paraguayan road network includes almost 4500 kilometers of paved roads, and nearly 60000 kilometers of secondary roads. The density of the road network is higher in the oriental region, and lower in the Chaco area. However, in 2007 was completed the paved connection to the Bolivian border across the Chaco region.
The Paraguay-Paraná waterway constitutes an essential route for the transport of exported and imported goods.
The railway which connects Asunción to Encarnación actually doesn’t operate, but there works still the connection between Encarnación and Posadas (Argentina) for the transport of agricultural goods.
Paraguay disposes of two international airports in Asunción and Ciudad del Este, and of several secondary airports in other zones of the country.
Media and Communications
In Paraguay are published five newspapers with national coverage, and a higher number of local press products. There are 5 Paraguayan TV stations. Additionally, essential international stations can be received by cable in the main urban areas.
The fixed line network is controlled by the state-owned COPACO Company. The cell phone network is opened to private operators. There are four competing mobile phone operators in Paraguay. During last years, the mobile phone coverage of the population exceeded widely the fixed line coverage.
Statistics
GDP (purchasing power parity): $30.9 billion (2005 est.)
GDP (official exchange rate): $7.586 billion (2005 est.)
GDP - real growth rate: 3.3% (2005 est.)
GDP - per capita: purchasing power parity - $4,900 (2005 est.)
GDP - composition by sector:
- agriculture: 27.5%
- industry: 24%
- services: 48.5% (2005 est.)
Labor force: 2.68 million (2005 est.)
Labor force - by occupation: agriculture 45%
Unemployment rate: 16% (2005 est.)
Population below poverty line: 32% (2005 est.)
Household income or consumption by percentage share:
- lowest 10%: 0.5%
- highest 10%: 43.8% (1998)
Distribution of family income - Gini index: 56.8 (1999)
Inflation rate (consumer prices): 7.5% (2005 est.)
Investment (gross fixed): 20.1% of GDP (2005 est.)
Budget:
- revenues: $1.334 billion
- expenditures: $1.37 billion, including capital expenditures of $700 million (2005 est.)
Public debt: 36.1% of GDP (2005 est.)
Agriculture - products: cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (tapioca), fruits, vegetables; beef, pork, eggs, milk; timber
Industries: sugar, cement, textiles, beverages, wood products, steel, metallurgic, electric power
Industrial production growth rate: 0% (2000 est.)
Electricity:
- production: 51.29 billion kWh (2003)
- consumption: 3.528 billion kWh (2003)
- exports: 44.17 billion kWh (2003)
- imports: 0 kWh (2003)
Electricity - production by source:
- fossil fuel: 0%
- hydro: 99.9%
- nuclear: 0%
- other: 0.1% (2001)
Oil:
- production: 0 bbl/day (2003 est.)
- consumption: 25,000 bbl/day (2003 est.)
- exports: NA (2001)
- imports: NA (2001)
Current account balance: $-170 million (2005 est.)
Exports: $3.13 billion f.o.b. (2005 est.)
Exports - partners: Uruguay 27.8%, Brazil 19.2%, Argentina 6.3%, Switzerland 4.1% (2004)
Imports: $3.832 billion f.o.b. (2005 est.)
Imports - partners: Brazil 30.9%, Argentina 23.3%, China 16.6%, US 4% (2004)
Reserves of foreign exchange and gold: $1.293 billion (2005 est.)
Debt - external: $3.535 billion (2005 est.)
Economic aid - recipient: NA
Currency: 1 Guarani (G) = 100 centimos
Exchange rates: guarani (G) per US$ - 6,158.47 (2005), 5,974.6 (2004), 6,424.34 (2003), 5,716.26 (2002), 4,105.92 (2001), 3,332.0 (January 2000), 3,119.1 (1999), 2,726.5 (1998), 2,177.9 (1997), 2,056.8 (1996), 1,963.0 (1995); note - since early 1998, the exchange rate has operated as a managed float; prior to that, the exchange rate was determined freely in the market
Fiscal year: calendar year
See also
External links
- CIA - The World Factbook -- Paraguay
- Central Bank of Paraguay
- Ministry of Finance
- Ministry of Industry and Comemrce
|
|
---|---|
Argentina · Bolivia · Brazil · Chile · Colombia · Ecuador · Guyana · Paraguay · Peru · Suriname · Uruguay · Venezuela |
|
||
---|---|---|
Sovereign states | Argentina · Bolivia · Brazil · Chile · Colombia · Ecuador · Guyana · Panama* · Paraguay · Peru · Suriname · Trinidad and Tobago* · Uruguay · Venezuela | |
Dependencies | Aruba* (Netherlands) · Falkland Islands (UK) · French Guiana (France) · Netherlands Antilles* (Netherlands) · (UK) | |
* Territories also in or commonly reckoned elsewhere in the Americas (North America). |