Paraguay lawmakers scrutinize public debt and fiscal deficit in 2027 budget debate

Paraguay's 2027 budget came under pressure from lawmakers who questioned how the government plans to control the fiscal deficit and account for growing public debt.

During the first session of the Bicameral Budget Commission, legislator Mauricio Espínola asked Economy and Finance Minister Óscar Lovera for a concrete road map to return to the fiscal responsibility law's deficit limit of 1.5% of gross domestic product. Lovera said the executive expects to reach that level in 2028.

The minister said the deficit had grown because some pressures, especially accumulated needs in the health sector, were no longer temporary. He put those health-related needs at $1.05 billion. Lovera said the 2027 budget includes funds to address projected health needs and that the government has new monitoring tools intended to prevent debts from accumulating again.

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So that we know what the liabilities of that ministry will be.

According to the Economy Ministry's explanation, the proposed budget represents spending equal to 17.3% of GDP. Excluding the effect of the debt stock, the figure would be 15.3%, which Lovera said supports a projection of returning to a 1.5% fiscal deficit in 2028.

Senator Esperanza Martínez demanded that each ministry and public body disclose its outstanding obligations and liabilities during budget hearings. She cited debts linked to the Public Works and Health ministries and said incomplete information makes it difficult to assess the real condition of the public accounts. She also requested details on tax expenditures, domestic and foreign debt, and revenue from binational entities.

Martínez further questioned public spending on advertising and institutional communication in 2027, the year before the 2028 general elections. She called for the amounts to be identified and for the money to be redirected toward public-interest campaigns.

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In this 2027 budget, we have to stop that, minister. We have to redirect that money.