Asunción, Agencia IP.- The international rating agency Moody’s reaffirmed in its latest report the investment grade achieved by Paraguay and maintained the country’s stable outlook. It highlighted the strong economic growth observed in the first quarter, as well as fiscal discipline and low external vulnerability.
One year after granting Paraguay, for the first time in its history, an investment grade rating, the agency has maintained the sovereign rating at «Baa3» with a stable outlook.
The report also underscores the robust year-on-year growth of 5.9% recorded at the end of the first quarter of 2025, compared to 3.6% in the same period of 2024. The agency emphasized that this dynamism was mainly driven by domestic demand, with investment and private consumption as the key engines of expansion.
It also noted that gross fixed capital formation rose by 12.7%, marking six consecutive quarters of positive growth.
On fiscal matters, Moody’s pointed out that in May 2025 the government registered a monthly fiscal surplus equivalent to 0.2% of GDP, which reduced the cumulative deficit to 0.3%. The agency considers that this performance, along with the authorities’ commitment, provides a credible path to achieve the fiscal deficit target of 1.9% of GDP in 2025.
Furthermore, it projected that the fiscal deficit will converge toward the 1.5% of GDP target in 2026, in line with the Fiscal Responsibility Law.
Additionally, the agency stressed that compliance with fiscal targets supports debt stability, while the debt-to-GDP ratio remains low both in absolute and relative terms. For 2025, Moody’s projects that this ratio will remain at levels similar to 2024, well below the median of regional peers with the same rating.
Finally, Moody’s highlighted the process of institutional strengthening as one of the country’s main strengths, driven by the fiscal reforms enacted by the government, having achieved all the targets set for 2024.