Paraguay’s Inflation showed a notable slowdown in 2025, after the country recorded a negative inflation rate (deflation) in December, which pushed the annual inflation figure down to 3.1 %. This development attracted attention in local and international media, as it highlights Paraguay’s relatively stable price environment in a region still affected by inflationary pressures.
Paraguay’s Inflation: Deflation in December
In December 2025, Paraguay’s inflation turned negative, with consumer prices falling by -0.3% on a monthly basis. As a result, this rare deflationary month had a direct impact on the overall inflation performance, therefore significantly lowering the annual inflation rate to 3.1%, which was below the Central Bank’s target level.
The main drivers behind this decline were falling prices in key consumption categories, particularly fuel and several food products. These price reductions outweighed increases seen in certain services and specific food items, resulting in an overall drop in the consumer price index.
Paraguay’s Inflation: Annual Development 2025
Over the course of 2025, the inflation in Paraguay followed a moderate and uneven path. Although some months recorded price increases, the deflation in December ultimately played a decisive role in reducing the yearly average.
Compared to previous years, the final inflation figure reflects improved price stability and effective monetary policy. Paraguay managed to keep inflation well within a manageable range, reinforcing its reputation for macroeconomic discipline and economic resilience.
Paraguay’s Inflation: Causes and Price Trends
Several factors contributed to the temporary deflation and lower annual inflation:
Fuel and transport prices: Declining fuel costs reduced transportation expenses and had a broad impact across the economy.
Food prices: Lower prices for various basic food products eased overall price pressure.
Currency and imports: Favorable exchange rate conditions helped reduce the cost of imported goods.
At the same time, prices for certain services, tourism-related activities and selected food products continued to rise, showing that the deflation was selective rather than economy-wide.
What This Means for Consumers and Investors
For consumers, the lower inflation in Paraguay translates into greater purchasing power in specific areas, particularly energy and everyday goods. However, not all prices declined. Still, the overall slowdown provides relief compared to higher inflation levels seen elsewhere in the region.
From an investor and business perspective, moderate inflation signals economic stability and predictability. Stable prices make long-term planning easier and strengthen Paraguay’s position as an attractive destination for investment, residence and business activities.
Conclusion
Paraguay’s Inflation in 2025 demonstrates a clear trend toward stability. The deflation recorded in December was a key factor in lowering the annual inflation rate to 3.1 %, underlining Paraguay’s controlled economic environment.
In a global context marked by uncertainty and rising prices, Paraguay continues to stand out with moderate inflation, sound monetary policy and a stable economic outlook—factors that are increasingly important for residents, investors and international observers alike.
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