Paraguay's economic activity surges 5.6% by May, driven by services and agriculture

Paraguay's economy demonstrated robust growth in the first five months of 2026, with the Monthly Economic Activity Indicator (Imaep) rising by 5.6%. This expansion was primarily fueled by strong performance in the services, commerce, and agricultural sectors, according to preliminary data from the Central Bank of Paraguay (BCP).

The primary sector recorded a significant year-on-year increase of 6.7% in May, contributing to a cumulative growth of 9.9% by the end of the month. Agricultural output saw a notable boost from increased production of soybeans, sugarcane, cassava, beans, sunflowers, and tobacco. However, this positive trend was partially offset by lower estimated yields for corn, cotton, sesame, and yerba mate. The livestock subsector experienced a downturn in May, mainly due to a reduction in cattle slaughter, although increases in pig and poultry slaughter, as well as milk and egg production, were noted.

In the secondary sector, a year-on-year increase of 1.8% was registered, bringing the cumulative growth to 4.3% by May. Electricity generation and distribution, along with water and sanitation services, showed positive performance. Conversely, the construction sector contracted due to slower public works execution, hampered by budgetary constraints and accumulated debts with contractors. Manufacturing also saw a negative variation of 1.6% in May compared to the previous year.

Despite these sectoral variations, the BCP maintains its projection for Paraguay's Gross Domestic Product (GDP) growth at 4.2% for the current year, with experts indicating an upward bias. The Imaep, while not encompassing all components of GDP, serves as a key short-term indicator of economic dynamics and reflects a positive trend for the Paraguayan economy.