Paraguay's formal employment rate hits 40%, president announces

President Santiago Peña announced that Paraguay's formal employment rate has reached 40%, a significant milestone where a substantial portion of the workforce is now registered in the social security system. This figure indicates that 40% of all employed individuals are covered by the Instituto de Previsión Social (IPS), which manages mandatory social insurance, including health and pensions.

Peña highlighted that this increase in formalization signifies an improvement in job quality, as these positions contribute to retirement funds. He stated that this represents a "substantial improvement" and generates "quality work" that includes pension contributions. The president, who took office in August 2023, emphasized that his administration has achieved "the lowest unemployment rates in recent history."

Data from the National Statistics Institute (INE) reveals that Paraguay's unemployment rate stood at 4.1% in the second quarter of this year, a decrease from 5.8% in the same period last year. The INE also reported that informal employment dropped to 60.1% in 2025, a 2.4 percentage point decrease from 62.5% in 2022.

President Peña reaffirmed his commitment to his campaign pledge of creating 500,000 new jobs by the end of his term in 2028, underscoring his administration's focus on economic growth and job creation.