The economy of Paraguay is marked by the dominance of the farming, commercial and service sectors. Industry, however, is less well developed, and mostly based on the processing of agricultural goods.
The commercial sector is supported by shopping tourism proceeding from Brazil and Argentina, as several imported products are cheaper than in these neighboring countries.
Paraguay figures as a MERCOSUR foundation member.
The most important component of the Paraguayan economy is the farming sector, which contributed 27% to GDP in 2006. The participation of commerce was 20.2%, and that of other services, including government, 38.4%. Industry’s part (including mining and construction) was about 20%.
After years of economic crisis, between 1999 and 2002, the Paraguayan economy grew at between 2.9 and 4.1% per year from 2003 to 2006. For 2007, the estimated growth is about 6.4%. Inflation in 2007 reached 6.0%.
Most enterprises are small, micro and individual ones, including subsistence jobs like street vendors. Only 4% of the Paraguayan labor force works in companies with more than 50 employees.
In June 2007 external foreign exchange reserves amounted to US$ 2153 million, and the foreign official debt US$ 2154 million, close to parity.
Fiscal surplus is provisionally reported as 0.5% of GDP in 2006 and 2007.
Paraguay’s economy (GDP) grew 5,8% in 2008, fastest growing sector being agriculture with 10,5% growth.
The most important export products of Paraguay are soybeans, meat, corn, animal feed, vegetable oils and electricity (see above)(6.4 TWh in 2008). In return, Paraguay imports industrial goods such as machines, electrical products, vehicles and chemical products. Petroleum is also a major import commodity for the country. Uruguay, Brazil and Russia are the main export markets for Paraguay, while the most important suppliers are China and Brazil. In 2007, exports totaled US$ 3.4 billion, and imports US$ 6.2 billion.