Equipo ViaParaguay
Fitch Ratings affirmed Paraguay's long-term sovereign rating at BB+ with a positive outlook on September 30, 2026, after its annual review. A sovereign rating is the grade an agency gives a country's ability to meet its debts; a positive outlook signals that the next decision could be an upgrade if certain conditions are met. The rating did not change, the outlook remains positive, and the report spells out which strengths support Paraguay and what is still missing for an upgrade.
One Notch Below Investment Grade
BB+ is the notch immediately below BBB-, the first rung of investment grade, the band of the scale that agencies reserve for issuers with the lowest credit risk. Fitch is the only one of the three major agencies that does not yet give Paraguay that category: Moody's granted it in 2024 and S&P Global Ratings in December 2025, as our report on the Moody's and S&P investment grade explains. Fitch's outlook has been positive since October 6, 2025, when it raised it from stable.
| Agency | Rating | Outlook | Investment grade |
|---|---|---|---|
| Fitch Ratings | BB+ | Positive | Not yet |
| Moody's | Baa3 | Stable | Since 2024 |
| S&P Global Ratings | BBB- | Stable | Since December 2025 |
Paraguay's long-term sovereign ratings after Fitch's review of September 30, 2026.
What Works in Its Favor
The Ministry of Economy and Finance (MEF), in its statement, summarizes the strengths Fitch highlights: prudent and consistent macroeconomic policies, low public debt and solid external liquidity, meaning foreign-currency resources to meet payments abroad.
Growth is helping. Real GDP grew 6.6% in 2025, against a median of 3.8% among countries rated "BB". Fitch projects 4.5% for 2026 and around 4.0% in the following years (for recent performance, see our report on first-half 2026 GDP). Inflation was 2.4% in May 2026 and 1.5% in August. According to the MEF, the appreciation of the guaraní, Paraguay's currency, and the large share of hydroelectric generation helped cushion the rise in international energy prices.
Central government debt stood at 36.1% of GDP in 2025, according to the MEF, citing central bank data; ABC Color, citing Fitch, puts public debt at 31.7%. Both figures are below the 51.6% median of the "BB" category.
The Pending Items Fitch Points To
According to ABC Color, Fitch's report points to three pending items: institutional weaknesses, low tax collection and recurring problems in the management of public finances. On taxes, see our guide to the tax system.
The most concrete item is payments to suppliers: according to ABC Color, citing Fitch, there are overdue payments of about USD 1.3 billion, equal to 2% of GDP, with pharmaceutical and construction companies.
The other item is the fiscal rule. The Fiscal Responsibility Law, which caps the government deficit, sets a deficit target of 1.5% of GDP; that target was pushed back from 2026 to 2028, according to ABC Color citing Fitch, and the International Monetary Fund (IMF) confirms that the authorities project converging to 1.5% in 2028.
What Fitch Asks for to Raise the Rating
According to ABC Color, the report makes an upgrade conditional on three advances:
- a credible fiscal consolidation that stabilizes debt and avoids new unrecorded arrears;
- diversified growth, with large-scale investment projects that raise per capita income;
- institutional strengthening, with sustained progress in fighting corruption and in justice and governance.
Among the recent large-scale investment announcements is the roughly USD 200 million forestry investment by J.P. Morgan Natural Capital.
What Is Left for the Investor
The rating held at BB+, the outlook remains positive and Fitch put in writing what it needs to see to raise it. In favor are growth, inflation of 1.5% in August and debt below the median of the category.
Those evaluating an investment or setting up a business in Paraguay can consult the ViaParaguay team through the contact form.