Asunción, Agencia IP.- The credit rating agency Standard & Poor’s has granted Paraguay investment-grade status, marking the second time in the country’s history that it has achieved this rating, and under the current government administration.
«Clearly, the S&P report points to numerous decisions taken by this government to achieve a second investment grade,» said Finance Minister Carlos Fernández, who announced the news at a press conference this Wednesday at Mburuvicha Róga.
The measures include institutional reforms promoted since August 2023 and economic growth which, for the third consecutive year, has exceeded 4%, reaching a surprising 6% this year, according to the latest update from the Central Bank of Paraguay.
Added to this is the government’s credibility in meeting its fiscal policy goals: on the one hand, inflation remained at 3.5%, close to the Central Bank’s target, and on the other, compliance with the fiscal deficit target of 1.5% of GDP for 2026, following the COVID-19 pandemic, as announced in the fiscal convergence plan.
Improvement in Paraguay’s credit rating
The improvement in the rating of bonds issued by the Paraguayan state (debt securities) is also part of the current administration’s policy. The minister explained that over a 10-year period there had been no changes in the ratings assigned by S&P, and that at the start of the new administration three meetings were held with representatives of the firm, leading to two upgrades and ultimately the granting of investment-grade status.
Paraguay moved from a BB+ rating to BBB-. The first investment-grade rating was granted by Moody’s in July 2024 and was reaffirmed this year.
An investment grade means that the bonds issued by a country carry a low risk of default, indicating that the issuing country has the capacity to meet its financial obligations. This, in turn, builds confidence among investors and in market operations.
«This will mean greater investment, more job creation, and Paraguayan companies accessing resources from abroad to finance many ventures. Ultimately, this will benefit the average Paraguayan with much more decent employment», the Minister concluded.