Experience in South America shows that macroeconomic stability depends on mechanisms that limit political discretion. Through technical committees and reserve funds, Chile has established a resilient system that can now serve as a roadmap for Paraguay’s economic safeguards.

In this third installment of the series “Constitutional Safeguards for Fiscal Stability in Paraguay,” we examine a case that marked a turning point in Latin America: the 1980 Chilean Constitution.

Paraguay ended fiscal year 2025 with an official fiscal deficit of 2.0% of GDP, according to the Central Government Financial Situation Report (Situfin) issued by the Ministry of Economy and Finance (MEF). This amounts to G. 7.48 trillion, equivalent to USD 1.047 billion, the best result since 2019 and an improvement over the 2.5% recorded in 2024.

The Treaty of Itaipu was signed on April 26, 1973, in Brasília with the aim of harnessing the water resources of the Paraná River for the production of electricity.

The National Constitution of the Republic of Paraguay, enacted on June 20, 1992, represents a milestone in the transition to democracy following decades of authoritarian rule. However, when it comes to fiscal governance, it is notably silent on the matter, a fact that has shaped the country’s economic trajectory.