Overview
Paraguay experienced robust economic growth albeit with strong annual fluctuations. These are mainly caused by the vulnerability of its agricultural sector (which represents 25% of GDP and 70% of total exports) to weather events. Electric energy through the hydroelectric bi-nationals Itaipu and Yacyreta, and agricultural output with soy and livestock production are Paraguay’s two leading economic activities. The country has high development potential in agricultural processing and components/parts manufacturing. This has already birthed a small textile industry.
Paraguay is diversifying its export supply and strengthening the sustainability of agricultural, forestry and agroindustrial value chains. Attracting investment is a priority in Paraguay’s National Development Plan for 2030, and international agencies have upgraded their financial ratings of Paraguay in 2024. This supports promoting Global Gateway related priority areas, especially in sustainable forestry and renewable energy and green hydrogen.
On human rights, Paraguay needs to improve its protection of vulnerable groups – children and adolescents, girls and women, indigenous peoples, persons with disabilities. Security is also threatened by violent crime and organised crime linked to drug trafficking, as well as a lasting guerrilla insurgency.
Our partnership
The EU collaboration with Paraguay is guided by the 2030 Agenda and the SDGs, as well as the Paris Agreement and the new European Consensus on development. In line with the Global Gateway strategy, the EU partnership with Paraguay for the period 2021-27 is focusing on a green and resilient economy and the fight against inequalities.
Team Europe in Paraguay brings together Spain, France, Germany and Italy, alongside financial institutions like the European Investment Bank (EIB).
The EU has allocated €70 million in grant funding towards the partnership in 2021-2027.
EU-Paraguay partnership documents can be found in the 'Related documents’ section below.
Our key initiatives
- Green and resilient economy
- Support for strengthening the sustainability and competitiveness of Paraguay’s agricultural, forestry, and agro-industrial value chains.
- Supporting the development of a socio-environmental traceability system for the beef, leather and soy sectors, transition towards sustainable and low-carbon production and promoting effective use of Intellectual Property Right and geographical indications (through AL-INVEST Verde).
- Supporting wildfire prevention, sustainable forest and ecosystem management including wetlands and riparian forests, and responsible land use in buffer zones around three protected areas.
- Expanding participation in the development of environmental services markets to involve communities, landowners, and stakeholders in sustainable resource management.
- Fighting against inequalities
- Helping Paraguay implement its law against gender-based violence and provide essential services for its victims.
- Strengthening vocational training in high-poverty areas to help communities benefit from a European mega-investment in forest plantations and pulp mill.
- Making labour market entry easier for youth from vulnerable backgrounds.
- Strengthening infrastructures for inclusive public services
- Financing the construction of a modern wastewater treatment plant and an extensive collector system in the Metropolitan Area of Asunción (through Global Gateway Investment Agenda).
- Financing the construction of a 500 KV electricity substation and its associated transmission lines (through Global Gateway Investment Agenda).
- Security and rule of law
- Supporting civil society organisations fighting for civil rights, human rights, misinformation and digital violence.
- Contributing to judiciary reform of the penitentiary system, providing alternatives to detention, and fighting money laundering and organised crime through El PACCTO 2.0 programme.
- Reducing demand for drugs and applying evidence-based global drug policies via the programme COPOLAD III.
- Developing Paraguay’s border management systems with the support of EUROFRONT programme.
