Paraguay Achieves Second Investment Grade: A Historic Milestone for the National Economy

Author: Econ. Jose Miguel Estigarribia Villasanti

In December 2025, Paraguay reached a second Investment Grade when it received a BBB‑ rating with a stable outlook from the international agency Standard & Poor’s (S&P), consolidating its position among the economies with the highest financial credibility in Latin America. This achievement adds to the investment-grade rating already granted by Moody’s, placing the country in a privileged position for global markets and international investors. (mef.gov.py)

Asuncion - Paraguay

 What Does “Investment Grade” Mean?

Investment Grade is a credit rating assigned by specialized agencies that indicates a country has a relatively low risk of sovereign debt default. Ratings at this level—such as BBB‑ or Baa3—are considered strong enough to attract capital from major institutional investors, banks, and multilateral organizations. (mef.gov.py)

By obtaining this rating from two of the main international agencies (Moody’s and S&P), Paraguay demonstrates that its economy has solid macroeconomic foundations, enhancing its credibility in global financial markets. (mef.gov.py)

Benefits of the Second Investment Grade for Paraguay

1. Lower Cost of International Financing

An investment-grade rating allows the country to access international financing at lower interest rates and better terms, reducing borrowing costs for both the government and private companies seeking external capital for productive projects. (mef.gov.py)

2. Attraction of Foreign Direct Investment (FDI)

Recognition of a solid and stable rating increases the confidence of foreign investors. Investment funds, multilateral banks, and multinational companies prioritize countries with investment-grade ratings, as this reduces perceived risk and facilitates long-term investment decisions. (mef.gov.py)

3. Boost to Productive Development and Employment

With higher foreign capital inflows and lower financing costs, Paraguay can stimulate infrastructure, manufacturing, energy, and service projects, contributing to job creation and sustainable economic development. (presidencia.gov.py)

4. Strengthening Macroeconomic Stability

Obtaining investment grade reflects international recognition of prudent fiscal policies, macroeconomic discipline, and a robust institutional environment, improving public debt management and encouraging policies aimed at balanced growth. (mef.gov.py)

5. Improved External Position and Competitiveness

Countries with investment-grade ratings typically have better access to credit lines and financing from multilateral organizations, as well as increased competitiveness in attracting long-term investment projects in strategic sectors. (presidencia.gov.py)

Factors That Contributed to the Achievement

The improvement in Paraguay’s rating is the result of responsible economic policies, fiscal stability, structural reforms, and sustained economic growth. S&P specifically highlighted the institutional strength, inflation convergence toward targets, and monetary resilience, as well as the country’s capacity to absorb external shocks. (mef.gov.py)

Moreover, this milestone is part of a long-term trajectory of improved sovereign evaluation, with significant steps in recent years from positive outlooks to the final investment-grade rating. (mef.gov.py)

Conclusion

Paraguay’s second Investment Grade is more than a technical figure; it is a key factor in consolidating international confidence in the national economy. This achievement opens doors to cheaper financing, increased foreign investment, stronger institutions, and sustainable economic growth. Beyond being a technical recognition, it is a powerful tool to promote socio-economic development in the medium and long term.

For businesses, investors, and citizens, this improved rating means stronger economic management, growth opportunities, and greater stability in the face of global challenges.

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Sources

• Standard & Poor’s Investment Grade Rating for Paraguay: Economic context and macroeconomic positioning. (mef.gov.py)

• Presidency of Paraguay: Evaluation by international standards. (presidencia.gov.py)