A Multi-dimensional Approach to the Post-COVID-19 World for Paraguay
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Paraguay has faced multiple shocks in the past five years as the COVID-19 pandemic was bookended by severe droughts that affected two key sectors, electricity production and agricultural production. The economy has demonstrated remarkable resilience during this period, supported by policy measures commensurate with the magnitude of the challenge, like the USD 2 billion fiscal response to the pandemic. These shocks have also exposed key underlying vulnerabilities in the country's economy and development model, including reliance on agricultural exports, informality, limited revenue-raising capa...
Paraguay has faced multiple shocks in the past five years as the COVID-19 pandemic was bookended by severe droughts that affected two key sectors, electricity production and agricultural production. The economy has demonstrated remarkable resilience during this period, supported by policy measures commensurate with the magnitude of the challenge, like the USD 2 billion fiscal response to the pandemic. These shocks have also exposed key underlying vulnerabilities in the country's economy and development model, including reliance on agricultural exports, informality, limited revenue-raising capacity, and exposure to the consequences of climate change. The response and stimulus recognised these issues and found new ways to address or circumvent them, albeit in many cases not efficiently or permanently. This report draws lessons from policy measures implemented during the pandemic and recovery phase and applies them to current strategic challenges. In doing so, it highlights policy priorities to make Paraguay's development path more inclusive, stronger and more resilient.
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