Paraguay is basking in a new skyline and the prestige of investment grade, but beneath the glass towers and cranes, many citizens feel left behind. Rising costs, weak services, and deep inequality are testing whether prosperity can truly trickle down.
A Skyline That Sells Stability
On Asunción’s north side, real estate agents show off glossy models of Distrito Perseverancia, a $300 million project touting boutiques, corporate towers, and penthouses that start at $700,000. A few blocks away, another developer promises “resort living” with the Petra Imperiale, a 73-story skyscraper designed to be among South America’s tallest. These are the monuments of a capital rediscovering ambition.
The economic backdrop has been equally striking. Paraguay joined the investment-grade club in 2023, with Moody’s upgrading its debt to Baa3. Growth clocked in at 4% in 2024, outpacing the regional average, powered by beef exports, manufacturing, and construction. The IMF projects 3.5% annual expansion through 2030. For a country long overshadowed by Brazil and Argentina, this is uncharted territory.
Analysts call Paraguay’s economy stable, pointing to a currency that has barely budged in two decades. Yet the same observers warn that stability on paper hides turbulence on the ground. Poverty has dropped sharply since the early 2000s, but inequality remains among the region’s highest. The cranes soaring over Asunción may signal optimism to foreign investors, but to many Paraguayans, they look like glass castles floating above a different reality.
Two Economies, One City
Step away from the luxury maquettes, and Asunción’s other economy appears. Along a disused rail track, Bienvenida Francisca Jara sells ice and herbal remedies from a modest home. On good days, she earns about thirty cents. Her debts grow faster than her sales. Meat, bread, and sugar have become harder to afford. She has no insurance and no reliable safety net.
Her story reflects why President Santiago Peña’s approval slipped below 50% last year. Voters rank grocery prices, jobs, fuel, and health care as their top concerns. Peña, meanwhile, spends much of his time abroad promoting Paraguay’s new investment-grade credentials. He celebrates Argentines and Brazilians who cross the border to shop and dine, and courts Europeans and North Americans with pitches of sunsets and low taxes.
But foreign direct investment actually fell by a third to $400 million in 2024, a fraction of what neighboring economies draw. The government points to higher tax revenues from merged customs and tax agencies as progress. Critics argue the bottlenecks are deeper: corruption, poor infrastructure, weak rule of law, and an education system that leaves workers unprepared. The gap between Asunción’s luxury condos and its struggling barrios is widening into two distinct economies.
Paper, Power, and Promises Delayed
The tension is most visible in projects once billed as game-changers. Paracel, a $4 billion pulp mill in northern Concepción, was supposed to launch in 2023. Now its start date has slid to 2027, tangled in financing delays and political disputes linked to former president Horacio Cartes. ATOME, a U.K. green-fertilizer venture, announced $1.3 billion in investment but admits funding has lagged; construction has yet to break ground.
Energy, Paraguay’s trump card, carries its own contradictions. The Itaipú dam produces some of the cheapest electricity in the world, but power cuts still darken Asunción nights. Crypto mining firms, lured by the surplus, now dominate demand. Canada’s HIVE spent nearly $60 million near the dam this year alone. The boom has sparked lawsuits over zoning and noise, sudden rate hikes from the state utility, and even heists targeting mining warehouses. Industry experts warn that Itaipú’s surplus could be exhausted by 2030 without new capacity, imperiling visions of Paraguay as a future AI or green-industry hub.
Education is an equally fragile pillar. An Inter-American Development Bank study found that low-income Paraguayan students trail OECD peers by the equivalent of eight school years, the worst in the region. Half of the surveyed experts in a regional competitiveness study cited inequality and lack of skills as significant drags on growth. Meanwhile, Asunción’s real estate boom risks overheating. Many shiny new apartments sit empty, while an official probe tied nearly 300 properties—including luxury homes and even a church—to money laundering. Paraguay now ranks among the most criminalized countries worldwide in global organized crime indices.
EFE@Daniel Piris
Data, Feelings, and the Next Test
Peña’s government says the response begins with discipline: holding inflation near 4%, easing imports to lower supermarket prices, and using data to prove progress. Nearly 100,000 formal jobs have been created since he took office, officials say, and the goal is to halve poverty by 2028.
But data has its limits. Poverty fell by only one percentage point in 2024. Meanwhile, Jara says local officials still take a fifth of her meager income in taxes: “Why don’t they make the rich pay their fair share and leave the poor alone?” Economists echo her frustration, arguing Paraguay’s flat 10% tax rate starves education and infrastructure. The government resists any hike, insisting efficiency reforms come first.
The divide between boardroom optimism and street-level frustration is Paraguay’s central challenge. The investment-grade rating has brought prestige. The skyline glitters with new towers. But without stronger institutions, modern infrastructure, and better schools, prosperity risks staying locked in penthouses and showrooms.
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Paraguay’s next test is not whether it can attract more glass and steel. The question is whether it can connect prosperity to people like Jara—through clinics, classrooms, and paychecks that make the boom real at ground level. If those dividends arrive, the skyline will symbolize more than speculation. If not, it may stand as a monument to a promise only visible from above.