Six Trends Shaping Paraguay In 2026
From geopolitics to elections, energy and migration: here’s what to watch this year.
While Congress may have decamped to Brazilian beaches and summer houses in San Bernardino, Paraguay keeps making headlines: not least the news that it boasted Latin America’s fastest-growing economy and best-performing currency in 2025.
Elections are looming later this year – to say nothing of Paraguay’s return to the World Cup after 15 years – and new political forces are rising to contest the Colorado Party’s eight-decade control. Events far away, from Caracas to Beijing and Washington, will have far-reaching consequences for Paraguayan politics and foreign policy.
Meanwhile, the demands of the energy transition, and a wave of foreign investment, are creating billion-dollar opportunities in emerging sectors and once-remote regions like the Chaco. Below, I drill down into some of the top developments you need to know about in 2026.
1. The Brazilian exodus accelerates
Relations between the Peña and Lula administrations have turned frosty lately. But Brazilian investors and immigrants can’t get enough of Paraguay.
Viral videos show expats from Paraná and Mato Grosso do Sul praising Paraguay’s cheap cost of living, lox taxes, laid-back lifestyle and affordable workforce. Some 21,000 Brazilians successfully applied for residency in in 2025, driving a record total of 44,000 applications. Recent major moves in the maquila sector include $3m and $6m investments from textile producers Fiasul and Grupo Lobo. But forestry firm EFISA also plans to install a $9m packaging plant, while slaughterhouse giant JBS is returning to Paraguay with a $70m investment.
Brazilian enthusiasm for Paraguay is nothing new: Stroessner’s “march to the west,” and the construction of the Itaipú dam, unleashed a tide of Brazilian colonists into Paraguay: today home to as many as 400,000 brasiguayos who often live in Portuguese-speaking enclaves. President Horacio Cartes (2013-18) famously invited Brazilian investors to “use and abuse” Paraguay.
But both “push” and “pull” factors will intensify this trend in 2026. Lula has just hiked taxes on top earners, and now seems likely to win re-election this October. The completion of the Bioceanic Bridge by June will speed the influx of Brazilian agribusiness to the Chaco.
Finance and economy minister Carlos Fernández Valdovinos has meanwhile vowed to maintain Paraguay’s user-friendly 10-10-10 formula (on corporate/income/VAT rates), and expanded the maquila regime to cover services. He has described Brazil as “our China”: a market of 300 million people right next door, and hungry for goods that Paraguay can produce cheaply with Brazilian financing. The flight of Brazilian investors to Paraguay, Peña predicted in a recent press conference, “will only grow.”
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