Paraguay, a landlocked country rich in natural resources and home to a young population, has made significant progress thanks to stable macroeconomic policies and institutional reforms, such as inflation targeting and fiscal responsibility laws. In July 2024, Moody's upgraded its sovereign credit rating to investment grade. This economic growth has led to a marked reduction in poverty, with the percentage of people living below the international poverty line dropping from nearly half in 2003 to 18% in 2023.

Despite these advancements, Paraguay remains highly vulnerable to extreme climate events like droughts and floods, which have hindered growth and the decline of poverty rates. Climate change may exacerbate these challenges, making it essential for the country to invest in climate adaptation, adaptive social protection, and more diversified economic growth. Addressing the need for quality job creation, particularly for women and youth, and improving public services such as health and education are vital for achieving sustainable and equitable prosperity. Additionally, strengthening state institutions and governance is crucial for future transformations.

Read More

Read Less