Paraguay’s labour market continues to show a strong dependence on micro, small and medium enterprises (MSMEs). According to data from the National Statistics Institute (INE), these productive units remain the backbone of employment generation across the country. They employ the majority of Paraguay´s workforce.
By the fourth quarter of 2025, total employment reached 3,297,188 people, compared to the 3,178,224 in the same period of 2024. This represents a year-on-year increase of 118,954 individuals. Within this expansion, MSMES played a decisive role. Furthermore, this consolidates their position as the primary drivers of job creation in the Paraguayan economy.
Microenterprises with the most employment within MSMEs
Among all business segment, microenterprises account for the largest share of employment within the MSMEs. In the fourth quarter of 2024, they represented 62.2% of the country´s main occupation, equivalent to 1,976,855 workers.
One year later, their share increased to 62.9%. This represents 2,073,931 people employed in this segment. In absolute terms, microenterprises added 97,076 workers in twelve months, explaining a significant portion of the total employment growth observed during this period.
This sustained expansion highlights the structural importance of small productive units in Paraguay’s labour market. Self-employment, family business and small commercial activities remain central components of economic life.
Small enterprises grow in job creation
Small enterprises also recorded a notable increase in employment participation within the MSMEs. Their share rose from 9.3% in the fourth quarter of 2024 to 9.9% in the same quarter of 2025.
In numerical terms, employment in this segment increased from 295,575 to 326,422. Although their relative weight remains smaller than that of microenterprises, the growth suggests a shift in their market strength. Small businesses are gradually increasing their capacity to generate employment.
This development reflects the long-term consolidation of this productive segment. A productive segment that often as an intermediate stage between microenterprise activity and larger corporate structures.
Medium-sized enterprises and their contribution
Medium-sized enterprises represent a smaller share of total employment of all the MSMEs. However, their contribution to job creation has also increased. Their participation rose from 3.4% in the fourth quarter of 2024 to 3.7 in the same period of 2025.
The number of workers employed in medium-sized enterprises grew from 108,060 to 121,996 people. This represents an increase in 13,966 jobs. While the percentage remains modest comparted with smaller business units, the expansions confirms that medium-sized companies continue to absorb labour. Also, they support the diversification of Paraguay´s productive structure.
MSMEs and their role in Paraguay’s labour market
When considered together, these enterprises accounted for 74.9% of employment in the fourth quarter of 2024. By the end of 2025, their combined share had risen to 76.5%.
In absolute numbers, MSMEs now employ more than 2.5 million people across the country. This increase of 1.6 percentage points indicates that recent employment growth in Paraguay has been largely driven by smaller productive units rather than by large corporate structures.
The figures reinforce the view that the Paraguayan labour market is fundamentally sustained by businesses of limited scale. These smaller businesses play a key role in absorbing labour across both urban and rural areas.
Large companies and their growth
Companies employing 51 or more workers also recorded employment growth during the same period. The number of employees in large companies rose from 365,496 in the fourth quarter of 2024 to 389,068 in the fourth quarter of 2025. This represents an increase of 23,572 workers.
Despite this expansion in absolute terms, their relative participation in total employment remains comparatively limited to MSMEs. Large companies accounted for 11.8% of employment in 2025. This only reflects modest structural change within the broader labour market.
Domestic work and data identification
Employment in domestic service showed a slight decline in its share of total employment. It moved from 7.1% in the fourth quarter of 2024 to 6.9% in the same period of 2025. However, the total number of workers in this category remained relatively stable, reaching 227,506 people.
Meanwhile, the category labelled “does not know” regarding the size of the employing unit decreased from 6.5% to 4.7%. This reduction suggests an improvement in statistical identification and reporting regarding the scale of economic units where workers are employed.
The central role of MSMEs in Paraguayan economy
Quarterly data also show steady growth in total employment throughout 2025. The number of employed individuals rose from 3,087,238 in the first quarter to 3,297,188 in the fourth quarter of the same year. During this period, microenterprises consistently maintained employment shares above 61%, while small and medium-sized enterprises stabilised near 10% and 3% respectively.
Taken together, the figures confirm that Paraguay’s labour market rests heavily on the activity of MSMEs. The Paraguayan government has developed, for example, a guide for these companies to support their expansion. Any strategy aimed at strengthening employment, improving incomes or advancing labour formalisation will inevitably need to consider the structural weight of this segment. The sustainability of job growth will depend largely on the conditions that allow these enterprises to invest, innovate and expand within an increasingly competitive economic environment.
