Paraguay: Key Industries

Agriculture and livestock anchor Paraguay's economy, led by soybeans, corn, wheat, and cattle. Large-scale mechanized farming, which expanded across the eastern region from the 1970s onward, made soybeans the country's dominant export crop, sold abroad as beans, meal, and oil. Cattle ranching in the Chaco and eastern grasslands likewise generates substantial export revenue, with Paraguayan beef reaching markets across South America and beyond. As of the 2025/26 marketing year, the U.S. Department of Agriculture projected Paraguayan soybean production at about 10.9 million metric tons and exports near 7.2 million metric tons, reflecting the country's continued standing as a significant global soybean supplier.

Hydroelectric power forms Paraguay's other major economic pillar. The Itaipu Dam, built jointly with Brazil on the Parana River, was completed in 1982 and reached full turbine capacity in 2007, making it one of the world's largest hydroelectric plants by generating capacity. The Yacyreta Dam, a similar partnership with Argentina begun under a 1973 treaty, reached its planned operating capacity in 2011 after long construction delays. Domestic demand consumes only a small share of the two dams' output, so Paraguay exports most of the surplus to its neighbors. As of 2023, hydropower supplied nearly all of the electricity generated within Paraguay, a position it has held for decades.

Manufacturing contributes food processing, textiles, leather, and wood products, much of it tied to agricultural raw materials. Low taxes and tariff advantages have also built a sizable maquila and re-export trade sector, centered on the border city of Ciudad del Este, where goods are assembled or transshipped toward Brazil and Argentina. According to the World Bank, Paraguay's economy grew 6.6 percent in 2025, among the fastest rates in South America, supported by strong agricultural output and hydroelectric revenue, even as informal employment remains widespread.