Paraguay generates hydroelectric power at an average Levelized Cost of Energy (LCOE) of $20/MWh and has a structural surplus that reached 61 TWh annually in 2024. With the gradual opening of the domestic market enabled by Law 6,977/2022 and its implementing regulations, eligible consumers can now contract directly with generators, including binational ones, without being required to go through the National Electricity Administration (Ande).

Our power generation (half from Itaipú, half from Yacyretá, and Acaray) currently ranges between 47,000 and 50,000 GWh annually in average years (moving average for 2022–2025, according to official reports from the Vice Ministry of Mines and Energy).

In this interview, the Paraguayan economist and advisor to Salvadoran President Nayib Bukele summarizes the key points of his series on Paraguay’s fiscal deficit. He analyzes the causes of the imbalance, proposes sweeping reforms to pensions, public spending, and investment, and outlines a roadmap toward a “zero deficit.” He also previews his next series: the country’s energy potential.

The quest for a zero fiscal deficit does not end in 2025; it is a long-term vision. A Paraguay with zero-based budgets and primary surpluses could invest more in health, education, and technology, thereby reducing poverty and attracting foreign investment. The cost of inaction would be “too high.” Paraguayan society, from the government down to individual citizens, must write the final chapter of this saga, deciding whether the zero deficit will be a triumph or an unfulfilled dream.

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.