Paraguay has delivered a rare result for Latin America: over two decades, the country reduced poverty from more than half of the population to 16% in 2025. During that time, about a third of residents moved above the poverty line, and in just the past two years, another 300,000 people did so.
The main driver was rising labor income, especially among people with the lowest earnings. People escaped poverty because they gained more stable and better-paid work.
The economy was helped by cheap clean electricity from the Itaipu and Yacyretá hydropower plants, along with development of roads, river ports, and digital connectivity. These conditions made production and logistics cheaper and the country more attractive to investors. In addition, Paraguay simplified the registration of small and medium-sized businesses, introduced more flexible labor contracts, and expanded incentives for export-oriented manufacturing and services.
Social policy was also well designed. The Hambre Cero (“Zero Hunger”) program feeds more than one million children in public schools, buying food from local farmers and small businesses. In this way, help for children also supports the local economy.
Problems remain, of course: poverty above the average level persists in certain regions, including San Pedro. That is why Paraguay, together with the World Bank, prepared the first detailed poverty map in more than two decades, covering all 263 districts of the country. It helps direct investment and programs to the places where they are needed most.
