description: three equal, horizontal bands of red (top), white,
and blue with an emblem centered in the white band; unusual flag in
that the emblem is different on each side; the obverse (hoist side at
the left) bears the national coat of arms (a yellow five-pointed star
within a green wreath capped by the words REPUBLICA DEL PARAGUAY, all
within two circles); the reverse (hoist side at the right) bears the
seal of the treasury (a yellow lion below a red Cap of Liberty and the
words Paz y Justicia (Peace and Justice) capped by the words REPUBLICA
DEL PARAGUAY, all within two circles)

Economy

Economy - overview: Paraguay has a market economy marked by a large
informal sector. The informal sector features both reexport of
imported consumer goods (electronics, whiskeys, perfumes, cigarettes,
and office equipment) to neighboring countries as well as by the
activities of thousands of microenterprises and urban street vendors.
The formal sector is largely oriented toward services, but a large
percentage of the population derive their living from agricultural
activity, often on a subsistence basis. The formal economy has grown
an average of 3% to 4% over the past five years. However, population
has increased at 3% a year over the same period, leaving per capita
income nearly stagnant. The WASMOSY government has continued to pursue
its economic reform agenda - with mixed success - in close
coordination with its partners in Mercosur (Southern Cone Common
Market). Paraguay's ongoing integration into Mercosur offers potential
for investment and growth. Although GDP grew by only about 1.5% in
1996, it is expected to grow at a higher rate in 1997.

GDP: purchasing power parity - $17.7 billion (1996 est.)

GDP - real growth rate: 1.5% (1996 est.)

GDP - per capita: purchasing power parity - $3,200 (1996 est.)

GDP - composition by sector:
agriculture: 26.3%
industry: 20.7%
services: 53% (1995)

Inflation rate - consumer price index: 8.2% (December 1996)

Labor force:
total: 1.8 million (1995 est.)
by occupation: agriculture 45%

Unemployment rate: 5.3% (urban) (1995)

Budget:
revenues : $1.25 billion (1995 est.)
expenditures: $1.66 billion, including capital expenditures of $NA
(1995 est.)

Industries: meat packing, oilseed crushing, milling, brewing,
textiles, other light consumer goods, cement, construction

Industrial production growth rate: 1.3% (1995 est.)

Electricity - capacity: 6,927,500 kW (1995)

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