According to the Consumer Price Index (IPC) announced by the Central Bank of Paraguay (BCP) on Tuesday, May 3rd, 2025, the inflation rate for May recorded 0%, showing a stability that exceeded experts' expectations. This is attributed to a mixed trend in goods and services prices. Cumulative inflation for the year stood at 3.0%, while the year-on-year inflation rate reached 3.6%. The central bank will submit this 3.6% figure to the National Minimum Wage Commission (CONASAM) to be used as a basis for minimum wage readjustment.

According to the report by César Yunis, Head of the BCP's Economic Sector, Gustavo Cohegner, Manager of Economic Statistics, and Guillermo Ortiz, Head of the Price Index Department, the 0% inflation in May is lower than the 0.4% recorded in the same month last year. The annual cumulative inflation is 3.0%, a decrease compared to 3.2% in the same period of 2024.

Core inflation, which excludes seasonal factors and volatile items, recorded 0.3% in May, with a cumulative 2.2% for the year and 4.0% year-on-year. This is slightly higher than the 3.9% recorded in April.

The report indicates that in May, prices of durable goods and services showed a moderate increase, while food and fuel prices experienced a moderate decline. Specifically, food saw a -0.1% decrease, fruits and vegetables -7.8%, and petroleum-related products -2.9%.

Conversely, clothing and footwear increased by 0.2%, medical expenses by 0.1%, lodging and home maintenance by 0.2%, and the restaurant and hotel sector by 0.7%.

Director Cohegner explained, "This result is a phenomenon driven by various mixed factors. There were positive upward factors in food (excluding fruits and vegetables), necessities, and services, while fruits, vegetables, and fuel saw negative fluctuations, exerting downward pressure on the overall inflation rate. These opposing effects largely offset each other, resulting in a 0% monthly inflation rate." He added that a similar pattern was observed in the annual inflation (3.6%).

The announcement of 0% inflation is considered an indicator of Paraguay's economic stability. The BCP's annual inflation target is 4%, and so far, stable price management has been maintained within this target. Economic experts anticipate that monthly inflation in June 2025 will remain at around 0.3%, with the exchange rate projected to be around 8,045 Guaranies per dollar by year-end.

Meanwhile, discussions on minimum wage readjustment are actively underway. Labor unions are demanding a 15% minimum wage increase, which would raise the current minimum wage of 2,798,309 Guaranies to 3,207,705 Guaranies. Some unions argue that the monthly cost of living for a family of four reaches 6,379,630 Guaranies, emphasizing that the current minimum wage cannot even cover half of living expenses. Therefore, social discussions surrounding minimum wage adjustment are expected to continue.

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