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🇵🇾 Paraguay /Economy & Trade

Parliamentarians question deficit, debt and budget execution in 2027 budget review

From ABC Color · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Ongoing story
  • Paraguay’s proposed 2027 national budget totals 166.3 trillion guaraníes, up 11.2% from the approved 2026 budget, and assumes 4.2% economic growth and 3.5% inflation.
  • The government projects a deficit of up to 3.9% of GDP in 2027 before returning to the 1.5% fiscal limit in 2028.
  • Lawmakers also questioned rising debt-service costs, budget execution and the government’s plan for managing available cash.

Paraguay’s proposed 2027 budget came under sustained questioning in the bicameral budget committee, with lawmakers challenging the government over the deficit, debt, health spending, budget execution and the exchange rate used to prepare the accounts.

The executive’s proposal totals 166.3 trillion guaraníes, or $25.751 billion at an exchange rate of 6,458 guaraníes per dollar. That represents an 11.2% increase over the approved 2026 budget. The official scenario assumes 4.2% economic growth, 3.5% inflation and nominal gross domestic product of 433 trillion guaraníes.

The government expects the deficit to reach as much as 3.9% of GDP in 2027, largely because of accumulated obligations in health and public works. It plans to return to the 1.5% fiscal limit in 2028. Senator Mauricio Espínola asked Economy and Finance Minister Óscar Lovera to explain how that target would be reached and what spending cuts might be needed to prevent further debt accumulation.

Lovera defended the projections and said the return to the limit remained feasible. “We believe it is feasible to meet the 1.5% target in 2028,” he said.

Debt was another focus of the hearing. Deputy Patricia Zena questioned the increase in the state’s financial commitments and warned about the growing burden of debt service. Payments rose from $668 million in 2020 to $1.7628 billion in 2025, with the figure projected to approach $2 billion. Lovera said public debt would remain below 40% of GDP in 2027 and could stand near 37% under a normal scenario. He also said guaraní-denominated debt had risen from 7% to 22%, while 77% remained in foreign currency. Legislators separately questioned the execution figures reported by the executive and the cash plan used to determine spending.

We believe it is feasible to meet the 1.5% target in 2028.

· Óscar LoveraParaguay’s economy and finance minister defended the government’s plan to return to the fiscal deficit limit.
About this summary

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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