Moody's maintains Paraguay's investment grade with stable outlook

The agency Moody's has confirmed the Baa3 rating for Paraguay, reaffirming the investment grade with a stable outlook. The country projects a GDP growth of 4.5% for 2026.

The credit rating agency Moody's has confirmed Paraguay's sovereign rating at Baa3, thus maintaining the investment grade with a stable outlook. The decision, announced on July 19, 2026, reinforces confidence in the Paraguayan economy in a context of high regional volatility.

4.5% growth and credible monetary policy

According to Moody's report, Paraguay will register a GDP growth of 4.5% in 2026, well above the Latin American average. This dynamism is supported by a credible monetary policy that has ensured price stability and currency strength for years.

The rating agency also highlights the low level of public debt in the country, which reduces the risks of default. Additionally, investments in infrastructure and private projects are diversifying the economy, reducing dependence on traditional sectors.

Vulnerabilities: climate and agricultural dependence

Despite the optimism, Moody's points out significant vulnerabilities. The Paraguayan economy remains highly exposed to climate shocks due to its strong dependence on agriculture. Furthermore, the limited revenue base of the Government and the high proportion of dollar-denominated debt are risk factors.

"Exposure to extreme weather events and limited fiscal diversification are the main challenges to maintaining the current rating," warns the report.

For investors, the stable outlook implies that no changes in the rating are expected in the short term. However, they recommend closely monitoring fiscal reforms and climate risk management.

What does this mean for businesses and citizens?

The reaffirmation of the investment grade facilitates access to international financing on favourable terms for the state and Paraguayan companies. This can translate into lower credit costs and more foreign investment.

For citizens, a stable economy usually means lower inflation and more job opportunities. However, dependence on climate and agriculture makes the country remain vulnerable to droughts or floods.

Moody's will update its assessment in the next periodic review, scheduled for within 12 to 18 months. Until then, Paraguay maintains its position as one of the few countries with investment grade in South America.