Abbreviated as PRY by abbreviationfinder.org, Paraguay has a large unofficial economy, which makes it impossible to provide reliable figures for economic activity. Corruption and liberal customs laws have made the country a smuggler’s paradise. The official economy is primarily based on agricultural and forestry production. The country had high economic growth during the 1970s, mainly due to an aggressive development strategy for agriculture and the construction of the Itaipú hydropower plant. In recent years, Paraguay’s economy has been unstable due to fluctuating returns in agriculture and the country’s large dependence on world market prices for commodity exports.
After several years of economic downturn, the economy returned again in 2010. The country then showed one of the world’s highest GDP growth (just over 14 percent), mainly due to high world market prices of agricultural products, mainly soy.
Agriculture and forestry employs about 25 percent of the country’s working population. Intensive agriculture is mainly conducted in Paraguay’s fertile eastern part. Mainly grown soybeans, cotton, wheat and coffee. The barren western region is mainly used for extensive livestock farming. The rapid expansion of the agricultural boundary in the east means that all arable land will be utilized in the not too distant future.
The ownership of the land is extremely unevenly distributed; however, some countervailing measures were taken after the regime change in 1989. The difference is large in terms of farming methods, capital access and returns between small and large farmers.
More than a third of Paraguay’s area is covered by forest. Since the 1970s, the forest has been harvested rapidly mainly with the aim of expanding agriculture in the eastern part of Paraguay. In addition to production for domestic consumption, timber, sawn timber and the by-product of palm hearts are exported to Brazil, primarily.
A few years ago, exports of certain types of wood were banned, and replanting of harvested areas is mandatory. Despite this, illegal logging and exporting continues, while forest regrowth is very low. This causes, in cold-cut areas, increasing environmental problems in the form of erosion, climate change and the eradication of animal and plant species.
Minerals and energy
Paraguay has only very limited mineral resources and the mining industry no longer employs about 1,000 people. But at the end of 2010, a large titanium deposit was discovered in the country’s eastern parts, which could have significant consequences for the country’s economy. In the country, limestone, plaster and various clays are mined. Minor deposits of iron, manganese, copper, bauxite and uranium have also been found but none of commercial size. Also, there are no major assets of natural gas or oil. On the river Paraná there are several major hydropower plants, among others. Itaipú and Yaciretá. In 2012, the government signed an agreement with Rio Tinto Alcán to build one of South America’s largest aluminum smelters in the country.
The manufacturing industry is mainly devoted to the processing of raw materials from agriculture, mainly cotton, soybeans and meat. Paraguay has few large industrial companies, and more than 70 percent of the sector’s workforce is employed by companies with less than 20 workers.
Paraguay has for a long time had a deficit in foreign trade. The value of exports fluctuates with world market prices and plant conditions for the country’s main export crops. The most important export goods are soy, meat products, cotton, leather, coffee and wood products. Imports mainly consist of machinery equipment for industry, vehicles and tools and machines for agriculture.
- COUNTRYAAH: Find major trading partners of Paraguay, including major exports and major imports with latest trade value and market share as well as growth rate.
The most important trading partners are Brazil, China and Chile. Paraguay is a member of the Mercosur free trade zone.
Tourism and gastronomy
Paraguay is visited by few tourists; In 2012, the number was 579,000. It is the only country in South America where the majority speak a Native American language, but you do not meet much of Native American culture in Paraguay.
The capital Asuncion has no attractions, but the atmosphere there during the hot and humid summers can be reminiscent of the stagnant South American communities of old times. If you go northwest through the sparsely populated Gran Chaco, you first pass through savannahs with vast pastures, then through the area colonized by the Mennonites, Germans emigrated from the Soviet Union in the 1920s; they have created their own, closed world here as aspiring farmers.
Note: the capital city of Paraguay is Asunción with a population of 2.3 million including suburbs . Other major cities include Ciudad del Este, Encarnación, Concepción, Pedro Juan Caballero.
Closer to the Bolivian border, nature is characterized by huge bushes and rich bird life. A journey south goes through a rolling landscape towards Encarnación. Along the River Paraná are the Jesuit missions created during the 17th-17th centuries: in particular, San Cosmé y Damián gives a good idea of how these stately facilities once looked and also La Santisima Trinidad de Paraná and Jesus de Tavarangue are worth a visit.
Distinctive elements of Paraguayan cuisine are freshwater fish, steak meat and a variety of tropical and subtropical fruits, vegetables and roots. National dish is sweeping paraguaya, corn bread with cheese and onions. Manioc bread and cassava pancakes are indispensable. The local wine attracts considerably less than the light beer.