The economy in Paraguay in 2024 was even better than it was in 2023. With stable inflation, Paraguay is emerging as one of the best performing countries in Latin America. Following the Paraguayan central bank estimation for 2024, GDP grew 4.1%, while inflation reached 3.8%, remaining relatively stable since the 3.7% recorded in 2023. Annual growth was driven by strong investment and robust household consumption, a result of government efforts to increase disposable income.

The number of households is set to increase moderately, while the average household size will shrink in Paraguay over 2024-2029. Couples with children will remain the dominant household type but the fastest household expenditure growth is forecast to be recorded by extended ("other") households. In addition, the share of households living in urban areas is projected to expand to 65.6% by 2029.

The beauty and personal care industry in Paraguay experienced significant growth in 2024, with double-digit increases in value sales. This growth can be attributed to several factors. One major factor is the return of many Paraguayan consumers to the formal market. This shift occurred after the purchase of contraband products from Argentina decreased, largely due to an exchange rate adjustment in Argentina that narrowed the price gap between the two countries. As a result, it became less profita

The population of Paraguay is predicted to Increase by 16.7%, due to changes in net migration and natural change, standing at a total of 8.1 million citizens by 2040. Demographic changes, economic conditions and social trends are all contributing to negative net migration. The birth rate in Paraguay is anticipated to fall between 2024 and 2040. Middle Youth (aged 30-44) will represent the largest portion of the population by 2040.

Overall, the tissue and hygiene market witnessed a positive performance in 2024, mainly triggered by economic strength and a reduction in smuggling activity from Argentina. Moreover, Paraguay’s GDP climbed by almost 4% year-on-year, while the country’s inflation decelerated for the second consecutive year, reaching its lowest level since 2020. Consequently, consumer disposable incomes increased.

The robust economy of Paraguay in 2024 was a significant determinant driving up demand for home care products. In addition, local consumers gained purchasing power because inflation dropped for the second consecutive year. While this helped to boost consumer spending power, poverty remained high in the country. Another important driver for local retailers distributing home care products in Paraguay in 2024 was the reduction of small and medium-scale smuggling from Argentina.

Flat tax rates boost economic freedom in Paraguay, but the ranking for economic freedom has slipped and corruption remains rife. The economy has exhibited resilience and inflation is well controlled, but dependence on agriculture creates risk for the external sector. Strong rises in incomes and solid population expansion will support the consumer market, but higher educational attainment is weak. Cooperation with other nations will help digital development, but 5G has yet to launch.

Thanks to higher than expected GDP growth, sales of soft drinks achieved solid growth in 2024, with above average temperatures also favouring demand for soft drinks over hot drinks. Carbonates and bottled water remain the most popular categories while RTD tea and RTD coffee are nascent. Thanks to growing health consciousness, free from sugar or reduced sugar variants now popularise carbonates with this trend also impacting sports drinks and energy drinks, particularly isotonic drinks.

Hot drinks volume sales experienced growth in 2024 thanks to the positive economic scenario. The overall market benefited from a slowdown in inflation, which provided a boost to disposable incomes However, growth was muted as higher temperatures favoured demand for soft drinks over hot drinks options. Volume sales of other hot drinks, specifically the national drink yerba mate, also grew although coffee remained the largest category and experienced the highest growth.

In 2024 retail volume sales of staple foods increased after a challenging 2023. Since the second half of 2023, the prices of staple foods decelerated compared to the earlier years of the review period, boosting consumption. Furthermore, at the end of 2023 Javier Milei was elected president and devaluated the exchange rate in Argentina. This drastically reduced the price gap between Argentina and Paraguay and led to a contraction in contraband and a rebound in formal retail volume sales.

Both value and volume sales rose of cooking ingredients and meals in 2024, with edible oils benefiting from a dramatic reduction in contraband. While poverty and income inequality characterise Paraguay’s small economy, cooking ingredients and meals are benefiting from urbanisation and the development of modern grocery retailers and warehouse clubs. However, the consumer base remains small, comprised of the country’s growing middle class and inhabitants of large cities seeking convenience.

Consumer health value sales saw above inflation growth in 2024 thanks to a significant increase in consumer focus on preventive health, benefiting vitamins and dietary supplements, despite smuggling from Argentina. Sharp increases in dengue fever supported acetaminophen, while social media and sports influencers benefited sports nutrition. Moreover, climate change stimulated increases in reported allergies and thereby boosted the popularity of antihistamines/allergy remedies (systemic).

Sales of dairy products and alternatives have improved in 2024 due to a drop in contraband products from Argentina. Despite this, the consumer base for dairy products and alternatives remains small, comprised of Paraguay’s growing middle class and inhabitants of large cities who are better able to afford the higher prices of packaged dairy and appreciate their convenience. Plant-based dairy remains a niche but is seeing dynamic growth thanks to increasing health and sustainability concerns.

Driven by robust GDP growth and recovery of purchasing power, snacks is set to record positive growth in volume terms across all categories in 2024. The expanding base of middle- and upper-income consumers boosted demand while changes in consumption habits favoured sales of ice cream. Devaluation of the exchange rate in Argentina at the end of 2023 raised prices in the neighbouring country which had a key role in reducing contraband in Paraguay during 2024 and positively impacted local sales.

Total volume sales of alcoholic drinks in Paraguay maintained positive growth in 2023. Demand was boosted by the full resumption of society in the wake of the pandemic and subsequent release of pent-up demand as well as the return of tourism. Consumers craved sophistication, which pushed demand towards higher-priced options such as craft beer, fine wine and premium spirits. However, sales were impacted by inflation and a flat economy which forced some demographics to reduce their spending.

Insight into income, wealth and expenditure of consumers and households is vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

The report examines the economic landscape of Paraguay and provides information on major monetary indicators, foreign trade and government finance. The economy expanded in real terms in 2023, driven by exports, private consumption, government spending. However, global economic slowdown, rising geopolitical tensions and economic fragmentation as well as tight financial conditions pose risks to the country’s economic outlook.

Ageing, urbanisation and migration continue to be major factors shaping the global population. The number of seniors around the world kept expanding in 2021 and is expected to grow further in the years to 2040. The number of small children is systematically falling globally due to decreasing fertility rates, later marriages and other factors influencing the change in lifestyles. Containment of the pandemic, gradual lift of the restrictions and political unrest encourage greater mobility and migr

The report examines key factors in supply chain risks in metals, energy and agricultural commodities. Production, market supply concentration and political risks analysis can help to better identify potential risks and prepare for potential disruptions. The briefing also identifies key industrial sectors and countries that are most vulnerable to commodity supply disruptions.

The report provides a global overview of production, consumption and prices of soybeans. Soaring input costs and supply disruptions put pressure on soybean producers and add more volatility to the market. Meanwhile, dry weather in South America has resulted in tightened global supply in 2021/2022, adding to upward pressure on soybean prices. Over the long term, rising demand for animal protein from the world’s growing population is set to support consumption of soybeans, an important feed input.

While Latin America’s digital landscape is less well developed than other regions globally, most measures continue to improve, with Coronavirus (COVID-19) also having served to drive the digital landscape development in 2020. With locked-down consumers working and learning at home, as well as shopping and entertaining themselves a lot more in an online environment, they were increasingly turning to digital solutions during the pandemic.