Paraguay's customs revenue collapses despite 6.6% growth forecast

The fiscal paradox defining Paraguay's economic moment came into sharp focus this week with a single figure: customs revenue has fallen 9.1% year-to-date, according to ABC Color, braking the growth of revenues at the Dirección Nacional de Ingresos Tributarios (DNIT) precisely as President Santiago Peña's government marks 24 consecutive months of economic expansion above 4% and the Banco Central del Paraguay (BCP) projects GDP growth near 6.6% for 2025. The country is growing, but its revenue-collection capacity isn't keeping pace, and that gap is starting to define the deeper tensions in the Paraguayan economy.

The customs decline becomes even more puzzling when set against the acceleration of electric and hybrid vehicle imports, which continue to climb according to ABC Color, even as the DNIT simultaneously floats eliminating the tax exemptions that have so far benefited that segment. The irony is striking: the tax authority is proposing to scrap the fiscal incentive precisely when the market has already priced it in and import volumes are rising, suggesting the decision owes more to pressure on fiscal revenues than to any coherent energy policy.

That revenue shortfall sits within a 2027 budget that specialists are already eyeing skeptically. Former minister Ferreira publicly warned of what he called "financial window-dressing" in the General Budget bill, while other analysts flagged the 9.9% jump in central government payroll spending and a 12.9% increase in public debt interest payments, both reported by ABC Color. The Ministry of Economy and Finance, for its part, placed G. 230.527 billion in Treasury Bonds in the local market, where the total stock of these instruments now hovers around US$ 1.2 billion, and simultaneously opened a window to receive bids from external creditors in what appears to be the prelude to a new international debt issuance.

The fiscal picture carries another politically charged component. ABC Color reported that the Banco Nacional de Fomento (BNF) disqualified the only competing bidder against Itti in a tender process, clearing the field for a firm with known ties to former associates of President Peña — a story that reinforces the structural narrative the IMF has identified among its eleven pending tasks for Paraguay: corruption as a systemic brake on growth. According to Última Hora, the multilateral was explicit in flagging that challenge alongside the fiscal deficit and money laundering in its most recent country assessment.

On the energy front, the Atome Energy situation adds another layer of uncertainty. The company formally notified termination of its contract with the Administración Nacional de Electricidad (ANDE) but is keeping its international arbitration offensive against the Paraguayan state active, according to ABC Color. The case exposes the fragility of the regulatory framework for large energy consumers at a moment when power-intensive sectors are demanding rules visibility through 2037, and the Comptroller General has already issued observations on the special tariff that left Atome outside the scheme. The arbitration outcome could have direct fiscal consequences in coming years.

The most notable item on the external-perception front comes from two directions. Fitch Ratings maintained Paraguay's rating at BB+ with a positive outlook, but once again postponed the upgrade to investment grade. President Peña downplayed the delay with a line that revealed more impatience than concern: "The rating agencies take their time," per ABC Color. Meanwhile, the OECD rapprochement advances with meetings in Uruguay, and the World Bank disbursed an additional US$ 300 million to support a more resilient economy — backing that coexists with over US$ 5.6 billion in external loans already in execution and more than US$ 1.6 billion in new credit operations for public works and infrastructure.

The fifth consecutive hike in fuel prices by private service stations, while Petropar artificially holds its own prices but faces doubts over how long it can sustain them, illustrates the tension between short-term management and structural sustainability. The Ministry of Industry and Commerce is promising deep reforms for the industrial sector and studying a merger with Senatur, but large industrial consumers are still waiting for concrete signals. What remains to be seen in the coming weeks is whether the budget defenses before Congress — suspended until after the municipal elections — will manage to contain a 2027 budget that several economists already consider politically bloated, and whether the new external debt issuance the government is preparing will find appetite in international markets at reasonable rates for a country still waiting to cross the investment-grade threshold.