In this installment of the 12-part series titled “The Origins of Paraguay’s Fiscal Imbalance: A Technical and Comparative Perspective,” we examine the dream of a zero fiscal deficit through a data-driven technical analysis, exploring how a zero fiscal deficit is not a neoliberal utopia: it is the sine qua non for Paraguay to stop living on borrowed money and set in motion a virtuous cycle of economic freedom.

In this tenth installment of the 12-part series titled “The Origins of Fiscal Imbalance in Paraguay: A Technical and Comparative Perspective,” we examine the international perspective through a data-driven technical analysis and explore how our country seeks to distinguish itself as a model of fiscal discipline on the global stage.

Paraguay’s fiscal imbalance, which reached 3.8% of GDP in 2024 according to the Ministry of Finance, reflects structurally unsustainable public spending, which grew by 7% annually between 2020 and 2024, compared with average economic growth of 3.5%. This imbalance, exacerbated by inefficiencies in the public sector and patronage pressures, threatens macroeconomic stability and increases public debt, which reached roughly 41% of GDP.

So far this year, investments under Law 60/90 have totaled USD 179 million, a 24% increase over the previous year. This growth reflects the private sector’s confidence in the country’s economic potential and its ability to drive strategic sectors such as agribusiness and technology.

The Inter-American Development Bank (IDB) estimates that every dollar invested in public infrastructure in Paraguay generates only $0.50 in economic returns over two years, well below the regional average of $1.10 and that of countries such as Chile ($2.70) or Peru ($2.00). This low return is due to delays in flagship projects, such as national highways and hospitals, as well as poor planning that diverts resources toward unproductive uses.