Paraguay Economic Activity: Business Sales Growth Trends in 2024

Paraguay’s business sales grew by 0.5% year-over-year in May 2024, according to preliminary data from the Central Bank of Paraguay (BCP).

Drivers of Commercial Sector Performance

The commercial sector experienced a varied performance throughout May, with growth primarily fueled by increased movement in specific retail and wholesale segments. According to the BCP, higher sales volumes in vehicle maintenance and sales, along with significant demand for technological products in the retail space, provided a necessary boost to the sector.

Wholesale activity also saw positive contributions from the trade of agricultural and livestock raw materials, fertilizers, agrochemicals, and fuels. Household equipment and clothing sales also trended upward. Conversely, the sector faced headwinds as wholesale demand for construction materials, pharmaceutical products, and certain technology segments declined during the same period.

Manufacturing Output and Industrial Shifts

Manufacturing activity displayed a mixed recovery, characterized by growth in specific industrial branches offset by contractions in others. Data indicates that increased sales in the production of oils, chemical-pharmaceutical products, non-metallic minerals, and paper derivatives supported the sector’s positive performance. Additionally, the leather, footwear, and common metals industries reported gains.

This industrial growth was partially tempered by reduced sales in several key areas, including:

• Meat and dairy processing
• Sugar, milling, and bakery products
• Beverages and tobacco
• Textiles and clothing
• Wood products and machinery

Service Sector Expansion and Contraction

The services sector maintained a favorable trajectory, largely driven by the hospitality and information industries. The BCP reports that growth in restaurant and hotel activities, alongside gains in information services and real estate, helped sustain the sector’s momentum.

However, this expansion was constrained by a downturn in other service categories. Specifically, transport services and household-oriented services recorded a decline in activity, which moderated the overall growth rate for the sector during the month of May.

Key Takeaways for Economic Monitoring

• Sectoral Divergence: Growth is not uniform; while vehicle and agricultural trade are performing well, construction and certain pharmaceutical segments are experiencing cooling demand.
• Moving Averages: The three-month moving average suggests that the economy remains above its recent baseline, even as monthly fluctuations occur across different industrial and service-oriented categories.