By Brad from Paraguay
Paraguay is in a boom cycle now, fueled by growing agricultural exports and income, foreign investment in oil, and mineral exploration. So while Paraguay has always been the “cheapest” choice in terms of living expenses in relation to its neighbors, right now that is slowly changing.
With Argentina’s latest crisis, things are definitely cheaper (in terms of overall living expenses) there now than in Paraguay. One only has to watch the streams of Paraguayans crossing the border into Argentina to spend their money and take advantage of the cheap gas, propane for cooking, food and consumer goods, to sense this.
While we own our house and aren’t tuned into the urban rental market, the price mentioned in last week’s Four Flags Journal for apartment rentals in Buenos Aires seems competitive or even cheaper than friends have experienced in Asuncion. And as we have just had a family member from Buenos Aires stay with us for the holidays, we learned that food prices are relatively comparable right now between the two countries.
The “fuel” for the Paraguay economy now is the agribusiness, which has always been the backbone of the Paraguayan economy’s foreign money-making operation. The oil and mineral exploration arena is booming now too. But one must keep in mind that this is just what it is called—an “exploration” effort. No massive oil strikes have been discovered or monster diamond or gold fields. Just more of what has historically happened in the past. Foreign investors and companies think conditions are ripe for finding massive amounts of black gold or glittering wealth buried in the ground. Will it pan out? It hasn’t in the past. But of course technology advances and hopes are high. And the money is flooding in. So right now it’s all thumbs up and happy smiles. We’ll see what happens. But in the meanwhile, the agribusiness is still on the upswing and that will fuel the economic fires for a while longer.
All this has led to the last few years of great financials for the country and predictions are that this will continue in the near term. The government’s challenge is to sustain this growth and invest in infrastructure in order to bring Paraguay up a notch or two in that arena. Or they can default to past experience where the folks in power can siphon it all off to themselves and their families. A little harder to do in a democracy than a dictatorship, but not too much harder.
With the current President Horacio Cartes in charge, hopes are high that he will keep things going in the right direction since he is a hard-headed businessman, not a career politician or snake oil salesman.
Right now all this translates to a building boom in Asuncion, with high rises, office complexes, shopping malls and upscale housing going up all over. Road and highway projects are also causing traffic problems, which are a “good” reason to have these problems! And as this building boom goes up, so do real estate prices. Some have called it a real estate “bubble,” which is probably pretty accurate. But that is mostly for the Asuncion area. If you get out into other towns or small cities, things are a bit more sedate. But infrastructure projects all over the country are probably going to fuel mini booms of their own. Road improvements, a light rail project, water and sewer upgrades and electrical grid improvements are all in the works.
All this should make Paraguay more attractive to foreigners wanting to check it out for investing, business or potential expats. And this could, over time, change the fact that Paraguay is the “cheapest” choice in South America.
All the best from the tiny, but not forgotten, Paraguay.
Our thanks to Brad for this insight into Paraguay. Brad tells us that he moved with his wife and young son to his wife’s native Paraguay this past year to escape the rat race and to live a much simpler and more tranquilo lifestyle. They reside in San Bernardino, a small town 40 km outside of Asuncion. San Bernardino is a popular summer resort in Paraguay, but thankfully returns to being mostly a quite little town during the other three seasons. Snapshots in the article above are taken near their current home.