Paraguay has achieved remarkable progress in reducing poverty over the past two decades. Through dedicated efforts and effective policies, the country halved its poverty rate from 51.4 percent in 2003 to 24.7 percent in 2022. Simultaneously, it cut extreme poverty by half, reaching 5.6 percent. According to World Bank estimates, Paraguay’s middle class has also experienced significant growth, expanding from 24.8 percent of the population in 2003 to 41.6 percent in 2022. Since 2014, however, the pace of poverty reduction has slowed, with most gains concentrated in the 2003–13 period. Economic growth, the primary driver of Paraguay’s poverty reduction, has decelerated in recent years. This slowdown was accompanied by a decrease in job creation and stagnation in real labor incomes. Moreover, a series of adverse shocks between 2019 and 2022, including the COVID-19 pandemic, high inflation, and a sequence of droughts that affected the agricultural sector, further eroded some of the progress made. Despite these challenges, Paraguay has begun to show signs of recovery. In 2023, the country witnessed a 2.8 percentage point reduction in moderate poverty and a decrease of 1.2 percentage points in extreme poverty. This report identifies four main structural barriers hindering poverty reduction in Paraguay and proposes priority policy options that can be implemented to address the country’s pressing socioeconomic challenges and disparities. This Paraguay Poverty Assessment, in conjunction with the Country Economic Memorandum (CEM) and the Country Climate and Development Report (CCDR), provides a comprehensive analysis of Paraguay’s development challenges. By offering insights and policy recommendations based on this analysis, these reports collectively aim to promote inclusive and sustainable growth in Paraguay.
Authors
- Citation
- “ World Bank . 2024 . Paraguay Poverty and Equity Assessment: Strategies to Boost Inclusive Growth and Poverty Reduction . © Washington, DC: World Bank . http://hdl.handle.net/10986/42354 License: CC BY 4.0 IGO . ”
- Collection(s)
- Poverty Assessment Spanish PDFs Available
- DOI
- https://doi.org/10.1596/42354
- Identifier externaldocumentum
- 34410596
- Identifier internaldocumentum
- 34410596
- Pages
- 86
- Published in
- United States of America
- Region country
- Paraguay
- Report
- 194103
- Rights
- CC BY 4.0 IGO
- Rights Holder
- World Bank
- Rights URI
- https://creativecommons.org/licenses/by/4.0/igo
- UNIT
- EFI-LCR-POV-Poverty and Equity (ELCPV)
- URI
- https://hdl.handle.net/10986/42354
- date disclosure
- 2024-11-01
- region administrative
- Latin America & Caribbean
- theme
- Inclusive Growth,Job Creation,Economic Policy,Green Growth,Economic Growth and Planning,Private Sector Development,Jobs
Files
Table of Contents
- Acknowledgments 3
- Abbreviations 3
- Methodological note 3
- Executive summary 3
- 1. Overview of the challenge 3
- 2. Which factors limit Paraguays ability to accelerate poverty reduction 3
- 3. How can Paraguay unlock its potential to foster inclusive growth and accelerate poverty reduction 3
- Appendix A. Nowcasting poverty in Paraguay 3
- References 3
- Figures tables and maps 4
- Abbreviations 8
- Executive summary 10
- What factors limit Paraguays ability to accelerate poverty reduction 11
- How can Paraguay foster inclusive economic growth and accelerate poverty reduction 13
- 1.Overview of the challenge 17
- Box 1.1. Paraguays new census and 2023 poverty figures 21
- Box 1.2. Understanding poverty lines National and international measures 23
- Spatial and horizontal disparities prevail despite poverty reduction efforts 27
- The face of poverty in Paraguay Young informal and with low levels of education 30
- Beyond income Multidimensional poverty access to services and assets 31
- 2.Which factors limit Paraguays ability to accelerate poverty reduction 33
- Levels of human capital 35
- Seizing the moment Investing in Paraguays youth to unlock the demographic dividend 38
- Health as an investment required to unlock human capital and economic dividends 41
- Access to and creation of quality jobs 45
- Obstacles to quality job creation in Paraguay The interplay of low productivity and skills mismatch 47
- Moving between jobs to seize better opportunities 51
- Impacts of the fiscal system on poverty 55
- Exposure to climate shocks 63
- Climate-related hazards pose threats to poverty reduction in Paraguay 67
- 3. How can Paraguay unlock its potential to foster inclusive growth and accelerate poverty reduction 70
- Improving learning outcomes and ensuring equitable opportunities in human capital accumulation 72
- Increasing access to and availability of quality jobs 73
- Improving the progressivity of the tax system and its revenue collection capacity 76
- Increasing resilience to climate shocks 77
- Appendix A. Nowcasting poverty in Paraguay 80
