Paraguay Records $311.7 Million Trade Deficit Through April Amid Export Decline

Graciela Maria Reporter

| 2025-05-15 06:26:14

Asunción, Paraguay - The Central Bank of Paraguay (BCP) has announced that Paraguay experienced a total trade volume of $10.61 billion through April 2025, marking a 1.7% decrease compared to the same period last year. Notably, exports saw a significant decline of 6.4%, while imports increased by 3.2%, resulting in a trade deficit of $311.7 million. This contrasts sharply with the trade surplus recorded in the same period of the previous year.

Total exports through April 2025 amounted to $5.149 billion, primarily driven down by decreased shipments of key primary goods, including soybeans.

The agricultural and manufacturing sectors presented a mixed performance. While the export of major primary products such as soybeans experienced a notable downturn, sectors like beef and aluminum demonstrated growth.

Primary product exports reached $1.303 billion by April 2025, a 15.0% decrease compared to the same period last year, negatively impacting overall export figures by 6.1 percentage points. The decline in soybean exports was the most significant, although increased exports of wheat, corn, and rice partially offset this.

Conversely, agricultural-based manufacturing (MOA) exports saw a 6.2% increase compared to April 2024, reaching $1.3618 billion and positively contributing 2.1 percentage points to the total export growth. Imports totaled $5.461 billion, bolstered by increased industrial supply imports, while fuel and lubricant imports decreased. Paraguay's main import partners were China, Brazil, and the United States.

The BCP report also highlighted a 4% increase in exports under the Maquila regime, reaching $362.3 million. The Maquila system offers tax benefits to foreign companies that establish factories in Paraguay to import raw materials, process them, and then re-export the finished goods. This is considered a crucial factor in promoting Paraguay's manufacturing exports.

The report emphasized the importance of continuously monitoring geopolitical factors and the volatility of international commodity prices, as these significantly impact Paraguay's trade environment. Recent global uncertainties and fluctuations in key commodity prices could directly affect Paraguay's export competitiveness and trade balance, necessitating careful analysis and preparation.

Argentina emerged as Paraguay's top export destination through April 2025, accounting for 37.2% of total exports with a value of $1.3239 billion. This increase is attributed to the recovery of the Argentine economy and a subsequent rise in demand for Paraguayan products.

Brazil ranked second, receiving 29.4% of Paraguay's total exports, amounting to $1.0468 billion. However, this figure represents a 5.1% decrease compared to the same period last year, likely influenced by fluctuations in the Brazilian economy and changes in demand for specific items.

Chile was the third-largest export market, accounting for 7.5% of total exports at $269 million. Notably, exports to Chile saw a significant decline of 10.8% compared to the previous year, potentially due to shifts in the Chilean market and adjustments in Paraguay's export strategies.

Paraguay's trade deficit through April 2025 raises concerns about the country's economic future. The poor performance of soybean exports, a key agricultural product, could significantly impact the agricultural economy and potentially lead to slower overall economic growth.

However, the growth in agricultural-based manufacturing and Maquila exports offers a positive outlook. This suggests a gradual diversification of Paraguay's export structure and increasing competitiveness in higher value-added manufacturing sectors. The government needs to strengthen policy support to maintain and expand this growth momentum.

Paraguay's future trade balance is expected to be heavily influenced by the global economic situation, particularly the economic trends of its main trading partners, Argentina and Brazil. Furthermore, the volatility of international commodity prices and geopolitical risks will continue to be crucial factors affecting Paraguay's export competitiveness and trade environment.

The Paraguayan government will need to pursue multifaceted strategies, including diversifying export markets, developing high-value-added products, and fostering the Maquila industry, to address the trade deficit and promote economic growth. Strengthening the competitiveness of the agricultural sector through technological development support and expanding export infrastructure also appear to be urgent tasks.

This trade deficit serves as a reminder of the Paraguayan economy's vulnerabilities and underscores the need for proactive responses and efforts from the government and relevant institutions.

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