The Paraguayan economy has demonstrated strength at the start of 2026, with the Economic Activity Indicator showing a 4.7% growth in the first quarter. This figure is accompanied by a substantial 8.2% year-on-year expansion when compared to the same period in the previous year. Government data indicates that this positive performance was not confined to a single area, but was distributed across all sectors of the national economy.
This widespread growth suggests a sustained and healthy trajectory for Paraguay’s economic development. The results highlight the diverse contributions from the country’s various productive sectors, painting a picture of a resilient and expanding economic landscape as the year progresses.
Primary sector leads agricultural expansion
The primary sector, encompassing agriculture and livestock, was a major driver of this economic upswing. It registered an accumulated year-on-year growth of 10.4%, with a 7.7% increase recorded for the month of March alone. This strong performance was largely attributed to an excellent agricultural season. According to data from the 2025/2026 campaign report by the Ministry of Agriculture and Livestock (MAG), there were higher production levels in key crops.
Specifically, harvests of soy, grain, sugarcane, cassava, beans, sunflower, and tobacco all saw significant increases. However, this growth was partially moderated by lower production levels for other crops, including maize, cotton, sesame, and yerba mate. In addition, the livestock sub-sector also contributed positively to the overall figures. This was driven by a greater level of slaughter for cattle, pigs, and poultry, alongside notable increases in the production of milk and eggs.
Secondary sector sees gains in energy and construction
The secondary sector, which includes manufacturing and construction, recorded a year-on-year increase of 7.3%. Throughout the first quarter of 2026, it achieved an accumulated expansion of 3.2%. A key factor in this growth was the increased generation of electrical energy. Furthermore, there was a favourable performance in related activities such as energy distribution, water provision, and sanitation services.
The construction industry also showed considerable progress, maintaining a heightened pace of execution for various projects. This activity was particularly noticeable in works originating from the private sector, signalling confidence in the economic climate. The combination of heightened energy output and a resilient construction market provided a solid foundation for the secondary sector’s positive quarterly results.
Mixed results within manufacturing
Within the broader secondary sector, manufacturing activities displayed a year-on-year variation of 4.5% and an accumulated growth of 1.8%by the end of the first quarter. The performance across different manufacturing industries was varied. Positive contributions came from the production of meat, oils, dairy products, milled goods, and bakery items. The beverages and tobacco industries, along with wood production, also performed well.
Further growth in the Paraguayan economy was noted in the manufacturing of non-metallic minerals, common metals, machinery, and equipment. Other industries, such as furniture manufacturing, also expanded. However, this overall expansion was tempered by declines in other areas. The production of textiles and clothing, leather and footwear, paper and its associated products, sugar, chemicals, and fabricated metal products all experienced contractions, partially offsetting the gains seen elsewhere in the sector.
Services demonstrate significant year-on-year growth
The services sector posted some of the most impressive figures, with a year-on-year increment of 8.2% and an accumulated growth of 4.8% for the quarter. The positive dynamics were evident across a wide range of activities. Commercial activity, government services, and services to households, including health, education, and recreation, all showed strong performance. The transport and financial intermediation sectors also contributed significantly to the growth.
Moreover, positive trends were observed in real estate services, services to businesses, and the telecommunications and information services sector. The hospitality industry, including restaurants and hotels, also registered an increase, reflecting a dynamic service-based economy. This broad-based growth highlights the increasing importance of the services sector to Paraguay’s overall economic health. Read more about real estate in Paraguay at the Property Section of The Asunción Times.
A sustained path of economic expansion
Taken as a whole, the results from the 2026 first quarter provide evidence of a sustained growth trajectory for the Paraguayan economy. The comprehensive and diverse contributions from all major productive sectors indicate a balanced and robust expansion.
The strong performance at the start of the year sets a positive tone for the economic outlook, underpinned by solid foundations in agriculture, industry, and services.
