Paraguay’s 2027 budget boosts pensions and scholarships while cutting debt and municipal funds

Paraguay’s proposed 2027 budget would direct more money toward pensions, non-contributory benefits and scholarships, even as the overall allocation for the Ministry of Economy and Finance declines.

The executive branch sent Congress a draft national budget totaling G. 166.3 trillion, or US$25.7544 billion. It allows for a fiscal deficit of up to 3.9% of GDP and projects tax collection 8.6% above the amount expected by the end of 2026.

The proposal changes the internal distribution of the ministry’s resources. Its total budget would drop from G. 28.3 trillion in 2026 to G. 28.0 trillion in 2027, a reduction of G. 188.655 billion, or 0.67%. The Central Program would rise from G. 783.965 billion to G. 971.902 billion. At the same time, funds not assigned to programs would fall from G. 27.5 trillion to G. 27.1 trillion.

The largest increase by amount would go to payments for retirement benefits and pensions. The draft assigns G. 8.5 trillion in 2027, up from G. 7.0 trillion this year. That represents an increase of G. 1.43 trillion, or 20.22%. The budget line covers retirement and pension payments for public- and private-sector employees, judges, university teachers, the armed forces and the police.

The General Directorate of Non-Contributory Pensions would also receive more. Its allocation would rise from G. 185.706 billion to G. 225.901 billion, an increase of G. 40.194 billion, or 21.64%. The proposal also reduces allocations for debt service, investments in surplus sectors, and transfers to governors’ offices and municipalities.