Country profile · South America
Paraguay
Paraguay is a landlocked country of about 6.1 million people (2022 census) in the middle of South America. The Colorado Party has governed for all but five years since 1947, and President Santiago Peña took office in August 2023. Paraguay is the only South American country that recognizes Taiwan. All its electricity comes from dams shared with Brazil and Argentina.
Where Paraguay ranks
All rankings →Who runs Paraguay?
Paraguay is a presidential republic. President Santiago Peña was born in Asunción in 1978. He studied economics in Asunción and at Columbia University in New York, and worked at Paraguay's central bank and the IMF. He belonged to the Liberal Party until 2016, then joined the Colorado Party and served as finance minister under President Horacio Cartes. Peña won the election of April 30, 2023 with about 43% of the vote and took office on August 15, 2023. The constitution allows a single five-year term. The Colorado Party holds 48 of the 80 seats in the Chamber of Deputies (chart). In October 2026 Cartes, the party's leader, broke with Peña over the choice of a candidate for 2028. In local elections on October 4, 2026 the Colorados won 187 of 263 mayors' races, but the opposition's Soledad Núñez won Asunción. The next presidential election is due in April or May 2028.
- Colorado Party 48
- Other parties 32
Photo (January 2025): US Department of State, Wikimedia Commons, public domain (cropped)
Who are Paraguay's allies and rivals?
Paraguay has recognized Taiwan since 1957. It is one of 12 countries that do, and the only one in South America. President Santiago Peña made a state visit to Taiwan in May 2026 and signed seven agreements. On October 12, 2026 China sanctioned Paraguay's technology minister, Gustavo Villate, over the Taiwan ties. Peña is close to US President Donald Trump. In March 2026 Paraguay's Congress approved an agreement that gives US military personnel in Paraguay legal immunity. Paraguay also agreed in August 2025 to take asylum seekers sent by the United States. Peña reopened Paraguay's embassy in Jerusalem in December 2024. Brazil and Argentina are the biggest trade partners, and Paraguay shares a giant dam with each. In March 2025 Brazilian media revealed that Brazil's intelligence agency had hacked Paraguayan officials in 2022 and 2023 to learn their plans for talks on the Itaipu dam. Paraguay suspended the talks, then declared the matter closed in November 2025.
Allies and partners
TaiwanDiplomatic ally since 1957
United StatesTroop agreement approved in March 2026
BrazilShares the Itaipu dam; buys 31% of exports
IsraelEmbassy reopened in Jerusalem in 2024
Tensions
ChinaSanctioned a Paraguayan minister in October 2026
- Itaipu Dam shared 50/50 with Brazil. Its tariff deal expires on December 31, 2026. No new deal has been agreed.
- Yacyretá Dam on the Paraná River shared with Argentina. It covered 10.5% of Paraguay's electricity use in 2025.
- Carmelo Peralta New bridge to Brazil on a road across the Chaco. Its two halves were joined in July 2026.
- Filadelfia Center of a Mennonite colony. Mennonites settled the Chaco from 1927 and numbered 38,731 in 2022.
- Paraguay
- Partner
Who does Paraguay trade with?
Paraguay's registered exports, which include electricity, were worth $11.1 billion in 2025, and its imports $18.1 billion (central bank). Brazil bought 31% of registered exports and Argentina 29.6% (chart). Argentina's crushing plants take about 80% of Paraguay's soybean exports, and in 2026 Argentina became the top buyer again. China supplied 34.8% of imports, with mobile phones the largest item, even though the two countries have no diplomatic ties. Because it recognizes Taiwan, Paraguay cannot sell beef or soybeans to mainland China. Beef earned a record of about $2.1 billion in 2025. Chile is the biggest buyer, and the United States is now second. President Santiago Peña has asked Washington for a beef quota of Paraguay's own. The economy grew 6.6% in 2025. Moody's gave Paraguay an investment-grade credit rating in July 2024, and S&P did the same in December 2025. Taxes are low: 10% on company profits and on most sales.
Sells to
Share of Paraguay's exports
- Brazil31.0%
Argentina29.6%
Chile8.9%- United States5.4%
- Taiwan3.1%
Buys from
Share of Paraguay's imports
- China34.8%
- Brazil22.9%
- United States6.2%
- Argentina6.2%
Singapore2.2%
Goods, 2025, as reported by Paraguay. UN Comtrade.
Why does Paraguay depend on soybeans and dams?
Paraguay grew a record 12.1 million tonnes of soybeans in the 2025/26 season. In 2024 it was the sixth-largest producer (chart) and the third-largest exporter (USDA). Barges carry the crop down the Paraguay and Paraná rivers to the sea. The industry says Paraguay has the third-largest river fleet in the world, after the United States and China. Cattle ranching and soy have cleared much of the Chaco, the dry west of the country, which lost 20.2% of its forest from 2000 to 2019 (NASA). All of Paraguay's electricity comes from three hydropower dams. Itaipu, shared 50/50 with Brazil, can produce 14,000 MW and covered 87.6% of Paraguay's use in 2025. Paraguay used about 71% of its half and sold the rest to Brazil. The Itaipu tariff deal ends on December 31, 2026. President Santiago Peña says talks on a new one wait for Brazil's presidential runoff on October 25. Crypto miners paid the state power company $295 million in 2025.
Soybean production, 2024
Full ranking →- Brazil144
- United States119
- Argentina48.2
- China20.6
India15.1- Paraguay11.1
FAOSTAT, Crops and livestock products
Why does Paraguay remember the War of the Triple Alliance?
From 1864 to 1870 Paraguay, led by Francisco Solano López, fought Brazil, Argentina and Uruguay at once. The war began after Brazil intervened in Uruguay and López seized a Brazilian ship. Historians disagree on the toll. The most-cited study estimates that Paraguay lost 60% to 69% of its people. Other studies estimate about half, or far less. Paraguay also lost about 40% of the land it had claimed. López was killed at Cerro Corá on March 1, 1870, now marked as Heroes' Day. Brazilian troops stayed until 1876. In July 2026 Paraguay protested to Brazil after President Lula said Paraguay had decided to invade Brazil, and asked for the return of war trophies. From 1932 to 1935 Paraguay fought Bolivia in the Chaco War, which killed about 90,000 to 100,000 people and won Paraguay most of the Chaco. Alfredo Stroessner then ruled as dictator from 1954 to 1989. A truth commission counted about 20,000 direct victims of his rule.