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🇵🇾 Paraguay /Economy & Trade

PGN 2027: Manuel Ferreira exposes hidden figures in Paraguay’s economic plan

From ABC Color · () Spanish

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

At a glance

Analysis Named sources New plan
  • Paraguay’s proposed 2027 national budget totals 166.3 trillion guaraníes, based on official projections for economic growth, inflation, exchange rates and tax revenue.
  • Former Economy Minister Manuel Ferreira said the budget relies on an unrealistic exchange rate and inflated borrowing and revenue figures to appear balanced.
  • Ferreira said more than $1 billion in planned borrowing would fund medical supplies and medicines rather than public works, potentially violating rules against using debt for current spending.

Paraguay’s proposed 2027 budget hides what former Economy Minister Manuel Ferreira calls a major financial mismatch, including an exchange rate he says does not reflect the market and debt intended for day-to-day expenses.

Presented to Congress this week by Economy Minister Óscar Lovera, the draft budget totals 166.3 trillion guaraníes, or $25.7544 billion. The government’s scenario assumes 4.2% gross domestic product growth, nominal GDP of 433.0 trillion guaraníes, inflation of 3.5%, an exchange rate of 6,458 guaraníes per dollar and an 8.6% increase in tax collection compared with 2026 estimates.

We do not believe, and neither do the expectations presented by the Central Bank, that the dollar is going to rise.

· Manuel FerreiraThe former economy minister questioned the government’s exchange-rate assumption for the 2027 budget.

Ferreira challenged the exchange-rate assumption during ABC TV’s Enfoque Económico program. The dollar is trading at about 5,900 guaraníes on the free market, he said, while the government used 6,458 guaraníes to calculate next year’s budget. That difference, in his view, artificially increases projected tax revenue and borrowing resources on paper, making the budget look balanced. “We do not believe, and neither do the expectations presented by the Central Bank, that the dollar is going to rise,” he said.

This practice violates Article 40 of the Financial Administration Law, which prohibits using debt for current expenses.

· Manuel FerreiraFerreira criticized plans to use long-term borrowing for medical supplies and medicines.

He also questioned the government’s borrowing plans, which he said would push total debt above $4 billion, equivalent to 6.5% of GDP. Of a $1.27 billion package of commitments, only $220 million would finance public works. The remaining $1.05 billion would cover medical supplies and medicines.

Ferreira compared long-term borrowing for operating expenses to using a credit card to buy food without having money to pay the bill at the end of the month. He said the practice violates Article 40 of the Financial Administration Law, which prohibits using debt for current expenses. The budget also includes $235 million in income from the transfer of Itaipu electricity, although the article ends while presenting a lower technical estimate.

Would you go into debt to eat a milanesa every Thursday?

· Manuel FerreiraHe used the comparison to illustrate why borrowing for routine expenses creates a financial risk.
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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