Poverty in Paraguay decreased from 24.0% in 2016 to 22.3% in 2020 and remained below the Latin American and the Caribbean (LAC) average of 26.3%. These figures mask the effect of strong efforts to decrease poverty before the shock of the COVID-19 pandemic, which brought the figure down to 19.4% in 2019. Extreme poverty consistently decreased in that period, from 7.9% to 6.0%, below the LAC average (8.7%). The population living in completely informal households decreased from 66.4% in 2009 to 58.0% in 2018 higher than the LAC average of 36.3%. Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 7.0 tonnes of carbon dioxide equivalent (t CO2e), higher than the average for LAC (6.3) but below the average for countries belonging to the Organisation for Economic Co-operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 100%, higher than 95.4% for LAC and 61.0% for the OECD. On the fiscal side, environmentally related tax revenue was 0.9% of gross domestic product (GDP) in 2020, below LAC average (1.0%) and the OECD average (2.1%). Total tax revenue as a percentage of GDP in 2020 (13.4%) remained considerably lower than the averages for LAC (21.9%) and the OECD (33.5%).
Latin American Economic Outlook 2022
Paraguay
1. Recent trends
2. Long-term development policies for a green transition
Paraguay depends economically on climatic conditions for income generation through agriculture, energy, and transport. The mitigation and adaptation efforts were made a national priority in 2011 through the National Climate Change Policy. Paraguay’s National Development Plan 2014-2030 includes strategic objectives, such as the development of sustainable habitats, appreciation and protection of environmental capital, and promotion of productive diversification.
To achieve its mitigation goals, Paraguay adopted a National Plan in 2017, including programmes for integrated transport-sector management, clean cooking, replacement of liquefied petroleum (LGP) gas cookers, sustainable use of forests in the Chaco region, forest landscape restoration, waste management and sustainable architecture. A national electro-mobility strategy has been developed and the government is examining the potential to produce green hydrogen. Regarding adaptation policies, the National Adaptation Plan 2022-2030 was developed through a participatory process. It contains 25 objectives for resilient cities and communities, health and epidemiology, ecosystems and biodiversity, energy, agriculture and food security, forestry, water resources, and transport. As an example, the resilience of communities is fostered through the ecosystem-based adaptation AbE Chaco project, which aims to reduce the region’s vulnerability to the impacts of climate change on food security.
In its international partnershipswithin LAC, Paraguay is engaged in a regional initiative to advance e-mobility, with support from the United Nations Environment Programme (UNEP) and the Green Climate Fund (GCF). For the post COVID-19 reactivation of sustainable tourism, the country is exchanging information with Costa Rica and Ecuador. Beyond the region, Paraguay is strengthening evidence-based actions and promoting private-sector involvement, with assistance from the Nationally Determined Contributions (NDC) Support Programme of the United Nations Development Programme (UNDP). Additional focal points of collaboration are sustainable agriculture and rural development (the Samaeul Undong project, with support from the Korea International Cooperation Agency), responsible agricultural production and consumption (in collaboration with the World Wildlife Fund [WWF]) and the strengthening of territorial governance capacities (with the Spanish Agency for International Development Cooperation [AECID]). Paraguay also supports plantation and reforestation efforts performed by 17 000 vulnerable families with the PROEZA project (2017), in collaboration with the GCF and the Food and Agriculture Organization (FAO).
In the area of green finance, Paraguay created the Mesa de Finanzas Sostenibles, a national platform for voluntary collaborations among financial actors to develop environmental and social risk-analysis systems and guidelines for sustainable financing of agricultural, livestock and agro-industrial activities. Paraguay also reviews environmental policies and fiscal incentives to stimulate the financing of sustainable agriculture, in collaboration with the United Nations’ Good Growth Partnership initiative. Paraguay is also engaged in the voluntary REDD+ (Reducing Emissions from Deforestation and Forest Degradation) process to access results-based payments for sustainable forest management. To date, it has received payments from the GCF for emissions reduction of 23 Mt CO2e achieved in 2015-17.
Key indicators – Paraguay
|
|
Paraguay |
LAC |
OECD |
|||
|---|---|---|---|---|---|---|
|
Social |
|
|
|
|||
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
Extreme poverty |
7.9 |
6.0 |
8.1 |
8.7 |
N/A |
N/A |
|
Poverty |
24.0 |
22.3 |
25.9 |
26.3 |
N/A |
N/A |
|
Share of Internet users (% of population) |
53.4 |
74.0 |
53.7 |
68.1 |
81.8 |
88.0 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2019 |
|
Gini index |
47.9 |
43.5 |
46.3 |
45.3 |
34.9 |
34.2 |
|
|
2009 |
2018 |
2009 |
2018 |
2009 |
2018 |
|
Share of total population in informal households (%) |
66.4 |
58.0 |
43.4 |
36.3 |
N/A |
N/A |
|
Share of total population in informal households, upper-income quintile (%) |
30.3 |
22.8 |
24.5 |
13.6 |
N/A |
N/A |
|
Share of total population in informal households, lower-income quintile (%) |
99.0 |
95.3 |
70.4 |
72.0 |
N/A |
N/A |
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
Health expenditure (% of GDP) |
6.7 |
7.2 |
6.5 |
6.8 |
8.7 |
8.8 |
|
SIGI index |
N/A |
32.8 |
N/A |
25.4 |
N/A |
17.5 |
|
|
2015 |
2018 |
2015 |
2018 |
2015 |
2018 |
|
PISA score in science |
N/A |
N/A |
411 |
407 |
489 |
487 |
|
Productivity and innovation |
|
|
|
|
|
|
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Labour productivity (% of the United States) |
21.1 |
20.0 |
29.0 |
26.6 |
69.9 |
67.2 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
High-tech exports (% of manufactured exports) |
7.6 |
5.1 |
8.4 |
7.2 |
16.5 |
16.2 |
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
R&D expenditures (% of GDP) |
0.1 |
0.1 |
0.3 |
0.4 |
1.8 |
2.0 |
|
Citizens’ perceptions and institutions |
|
|
|
|
|
|
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Share of population satisfied with efforts to preserve the environment (%) |
32.1 |
36.8 |
46.2 |
42.0 |
55.3 |
51.2 |
|
Share of population with confidence in national government (%) |
28.5 |
29.0 |
34.2 |
39.4 |
40.3 |
46.3 |
|
Share of population that thinks corruption is widespread throughout government (%) |
73.7 |
85.0 |
74.5 |
70.0 |
59.0 |
54.9 |
|
Share of population satisfied with the education system (%) |
68.7 |
60.8 |
64.9 |
54.3 |
67.0 |
66.8 |
|
Share of urban population satisfied with the availability of quality health care (%) |
49.7 |
52.2 |
49.2 |
48.9 |
68.2 |
69.5 |
|
Environment and the green transition |
|
|
|
|
|
|
|
|
2004-19 |
|
2004-19 |
|
2004-19 |
|
|
Loss of natural and semi-natural vegetated land (%) |
3.5 |
|
1.5 |
|
1.3 |
|
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
GHG emissions per capita excluding LUCF (t CO2e) |
7.0 |
7.0 |
6.3 |
6.3 |
9.6 |
9.1 |
|
Air pollution – exposure to PM2.5 (annual average exposure to more than 10 µg/m3, % of population) |
100 |
100 |
95.5 |
95.4 |
61.3 |
61.0 |
|
|
2016 |
2020 |
2016 |
2019 |
2016 |
2020 |
|
Contribution of renewables to total primary energy supply (%) |
127.9 |
101.5 |
34.2 |
33.4 |
19.7 |
22.9 |
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Marine protected areas (% of territorial waters) |
N/A |
N/A |
2.5 |
7.3 |
16.5 |
18.6 |
|
Fiscal position |
|
|
|
|
|
|
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
Environmentally related tax revenue (% of GDP) |
1.0 |
0.9 |
1.1 |
1.0 |
2.4 |
2.1 |
|
Total tax revenues (% of GDP) |
13.4 |
13.4 |
22.2 |
21.9 |
33.6 |
33.5 |
|
Share of VAT (% GDP) |
5.1 |
4.9 |
5.8 |
5.6 |
6.6 |
6.7 |
|
Share of PIT (% GDP) |
0.2 |
0.2 |
2.1 |
2.2 |
7.8 |
8.3 |
|
Share of CIT (% of GDP) |
2.0 |
2.3 |
3.3 |
3.4 |
2.9 |
2.7 |
|
Perception of tax evasion (%) |
N/A |
27.0 |
N/A |
27.3 |
N/A |
N/A |
|
Debt service (% of total tax revenue) |
6.6 |
10.5 |
11.3 |
13.0 |
5.6 |
5.2 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2019 |
|
Social expenditure (% of GDP) |
8.5 |
11.4 |
11.5 |
13.6 |
20.0 |
19.9 |
Note: See the Reader’s Guide for definitions and sources.