Economy Overview:

    Agriculture, including forestry, accounts for about 25% of GDP, employs
    about 45% of the labor force, and provides the bulk of exports, in which
    soybeans and cotton are the most important. Paraguay lacks substantial
    mineral or petroleum resources but possesses a large hydropower potential.
    In a major step to increase its economic activity in the region, Paraguay in
    March 1991 joined the Southern Cone Common Market (MERCOSUR), which includes
    Brazil, Argentina, and Uruguay. In 1992, the government, through an
    unorthodox approach, reduced external debt with both commercial and official
    creditors by purchasing a sizable amount of the delinquent commercial debt
    in the secondary market at a substantial discount. The government had paid
    100% of remaining official debt arrears to the US, Germany, France, and
    Spain. All commercial debt arrears have been rescheduled. For the long run,
    the government must press forward with general, market-oriented economic
    reforms. Growth of 3.5% in 1993 was spurred by higher-than-expected
    agricultural output and rising international commodity prices. Inflation
    picked up steam in fourth quarter 1993 because of rises in public sector
    salaries and utility rates. GDP growth continued in 1994 at 3.5%. Although
    inflation declined a bit over 1993, increases in food prices, and crop and
    infrastructure damage from heavy rains at the end of the year, forced
    inflation to 18%, above the government's target of 15%. Paraguay reaffirmed
    its commitment to MERCOSUR on 1 January 1995 by implementing the
    organization's common external tariff.


National product:
    GDP - purchasing power parity - $15.4 billion (1994 est.)
National product real growth rate:
    3.5% (1994 est.)
National product per capita:
    $2,950 (1994 est.)
Inflation rate (consumer prices):
    18% (1994 est.)
Unemployment rate:
    11.2% (1994 est.)
Budget:
  revenues:
    $1.2 billion
  expenditures:
    $1.4 billion, including capital expenditures of $487 million (1992 est.)


Industrial production:

    growth rate 3.6% (1993 est.); accounts for 20% of GDP
Electricity:
  capacity:
    6,530,000 kW
  production:
    26.5 billion kWh (1992)


  consumption per capita:
    NA
  note:
    much of the electricity produced in Paraguay is exported to Brazil and
    domestic consumption cannot be determined


Economic Activity

Industries:

    meat packing, oilseed crushing, milling, brewing, textiles, other light
    consumer goods, cement, construction
Agriculture:
    accounts for 26% of GDP; cash crops - cotton, sugarcane, soybeans; other
    crops - corn, wheat, tobacco, cassava, fruits, vegetables; animal products -
    beef, pork, eggs, milk; surplus producer of timber; self-sufficient in most
    foods

Exports:

    $728 million (f.o.b., 1993 est.)
  Commodities:
    cotton, soybeans, timber, vegetable oils, meat products, coffee, tung oil
   Major Trade Partners::
    EC 37%, Brazil 25%, Argentina 10%, Chile 6%, US 6%


Imports:

    $1.38 billion (c.i.f., 1993 est.)
  Commodities:
    capital goods, foodstuffs, consumer goods, raw materials, fuels
   Major Trade Partners::
    Brazil 30%, EC 20%, US 18%, Argentina 8%, Japan 7%
External debt:
    $1.4 billion (yearend 1993 est.)