Paraguay Suffering as Inflation Pushes Cost of Imports to 16-Year High

By Autumn Spredemann
Autumn Spredemann
Autumn Spredemann
Reporter
Autumn is a South America-based reporter covering primarily Latin American issues for The Epoch Times.
November 30, 2021 Updated: November 30, 2021

The upward trend of prices on items imported into Paraguay continues with no end in sight.

Inflation on imports was 9.3 percent higher in 2021 than it was in the same recorded period in 2020, making it the highest level recorded since 2005, according to a study by the Central Bank of Paraguay.

“Just forget about trying to buy any [imported] fruits or vegetables,” Ramona Benitez told The Epoch Times.

Benitez is a resident of Encarnación, Paraguay, a city located on the Paraná River.

She said the city has been running short on things such as fruits and vegetables for months.

“It’s an ugly situation made even harder by unemployment,” Benitez said.

Like many, Benitez lost her job as a teacher during the Chinese Communist Party (CCP) virus lockdowns in 2020. Unemployment in Paraguay reached 7.9 percent in the first quarter of 2020 and continued to increase in the first quarter of 2021.

In Asunción, resident Silva Torres told The Epoch Times, “Fuel [gas] prices are through the roof.”

Torres stated that you can’t even buy fish in the nation’s capital these days, due to critical shortages driving inflation.

“The beef has also gotten very expensive,” Torres said.

The price of gas in the country, which imports all of its petroleum-derived fuels, has gone up four times in 2021 due to global demand as economies continue reactivating.

Torres says prolonged drought conditions in the region are affecting the ability of container ships to travel on riverways, bringing imports and exports to a near standstill.

Drought has also hit the local fishing industry hard, affecting small towns that rely on the maritime industry for income along the Paraguay and Paraná rivers.

When asked if the inflation was noticeable in supermarkets, Torres responded, “Oh my, yes! We very much feel it in the markets.”

The Paraguay and Paraná rivers are of vital importance to trade and commerce between the “southern cone” nations of Paraguay, Brazil, Bolivia, and Argentina, all of which are participating members of the South American trade bloc Mercado Común del Sur.

The trend of diminished water levels in the rivers began three years ago and reached record lows in 2021.

Transport for large vessels in these conditions has become difficult—or impossible—in some parts.

Hydrology engineer José Luis Ávila pointed out that the historically low water levels are atypical for this time of year, with no significant rainfall recorded near the Paraguay or Paraná rivers. Consequently, they have a depth of only 11 inches in some places that normally see a lot of shipping traffic.

The economic consulting group MENTU stated that the high costs of sea freight, combined with the rise in international fuel prices and delayed transit, are the primary factors driving the nation’s historically high inflation.

“This could limit the availability of imported goods in demand at the end of year festivities, which are times of greatest consumption,” the organization stated in the Financial Pulse section of their website.

Autumn Spredemann
Autumn is a South America-based reporter covering primarily Latin American issues for The Epoch Times.