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Paraguay has established policies for economic and social development: free trade policy, free exchange policy, general stability of prices, guarantees for foreign investments, tax benefits, a stable and punctually serviced foreign debt, credit policy for
promotion of investments. Inflation is minimal and industrial, agricultural and cattle-raising development are proceeding at a successful pace.
Economic Information (2002)
| GDP (current): | US $5.391m |
| GDP growth (real): | 2.2% |
| Per capita income (average): | US $974 |
| Inflation rate: | 14.65% |
| Official Rate of Exchange: | None. The Guarani floats at market rates |
| Annual average exchange rate: | US $1=G 7,150 |
| Foreign debt: | US $2,283,000,000 |
| Foreign reserves: | Total equivalent to US $649,600,000 |
In January 1995, Paraguay -along with Argentina, Brazil and Uruguay- became members of MERCOSUR, the "Southern Cone Common Market". With the elimination of internal tariffs on 85% on all good produced by the member-countries, and total elimination scheduled for the year 2006, what may now be regarded as Paraguay's domestic market has effectively grown from some five million people to somewhere an excess of 200 million, the majority of them in the more affluent societies of Argentina and Brazil.
The principal industries are those related to cattle, such as cold storage plants, tanneries, leather goods manufacture, etc. Other important industries include textiles, cottoned oil, tung, soy bean, sourmills, construction materials, cement and lime, tobacco and sugar.
The government has a policy of encouraging Paraguay's relatively small industrial sector to diversify into non-traditional areas. Nine specific areas have been targeted by the current government as being of special significance to the economy's export sector. These include: agroindustries, particularly in vegetable oils, based on Paraguay's large soybean production; textiles, based on the country's existing and sizeable cotton production; leather products and energy-intensive industries such as metal-mechanics and chemicals, to make use of Paraguay's vast availability of inexpensive hydroelectric energy.
