Asimcopar: Minimum Wage Hike Without Technical Basis Hinders Investment

Paraguay's business community is voicing strong opposition to a recent 5% minimum wage increase, arguing it disregards technical economic indicators. The Association of Importers and Merchants of Paraguay (Asimcopar) stated that the increase significantly exceeds the technical inflation rate of 2.4%, as reported by the Central Bank of Paraguay. The association contends that this presidential decree, enacted without adherence to technical criteria, undermines legal predictability and deters foreign investment. Furthermore, it negatively impacts the cost structure for businesses already struggling to recover from the pandemic's economic effects. Asimcopar highlighted that such politically driven adjustments create uncertainty, making it difficult for companies to plan and recalculate their operational expenses. The group fears that this arbitrary decision-making process, where the wage hike could be higher in the future, discourages investment and deviates from international best practices. They are calling for a modernized approach to wage adjustments, advocating for a tripartite table involving the government, employers, and unions, using data from the Central Bank and the National Statistics Institute. The outcome of these negotiations should then be codified into law by Congress, establishing stable parameters and removing discretionary political influence. The association also pointed to the exchange rate gap with Brazil as a factor hindering the arrival of neighboring industries, further impacting competitiveness.