The Republic of Paraguay, a landlocked country in South America, is bordered by Argentina, Brazil, and Bolivia, and has a Mediterranean climate with almost seven million inhabitants. 60% of the country lives in the urban centers of Encarnación, Ciudad del Este, and the capital city of Asunción. Political and economic stability have given the country the largest economic growth in Latin America in the last 30 years. Considered an upper middle-income economy, in recent years the country has positioned itself as an attractive and orderly place for investments, further fueling economic growth. Paraguay is a country of countless natural resources, with a growing and productive agricultural and livestock sector. Clean and renewable energy is abundant and exported regionally. The country is largely flat with low-lying hill regions 62% of Paraguay’s approximately 7 million inhabitants reside in urban areas, and the annual urban growth rates are 1.7%. Population projections for 2030 point to an additional 1 million people living in the country, and a 65.7% residing in urban areas, while in 2050, the country’s estimated population will top 9 million inhabitants, of which 74.3% will reside in urban areas. Paraguay has made significant strides in poverty reduction and lowering inequality, reducing the number of people living in poverty in 2011 from 37% to 24.2% in 2018. GDP per capita in 2017 was estimated to be US$5.335 with an annual growth rate of 4.8%.5,6 Nevertheless, significant challenges regarding access to land and the inequitable distribution of the country’s wealth remain. Major economic sectors are principally commodity based, and include exports of energy, beef and soy. The country has taken significant steps in recent years to diversity the economy and has a growing informal commerce and services sector. With the support of the World Bank, the Paraguayan government aims to promote sustainable growth and institutional strengthening, while supporting investments in human capital and advancing the fight against corruption. The ongoing drought in Paraguay (beginning in late 2018 and projected to continue through early 2012), has hit the country’s production and trade of key economic staples particularly hard, causing Paraguay’s central bank to cut back its annual growth projection.

Paraguay’s economic reliance on agriculture, animal husbandry and hydroelectric energy production make it particularly vulnerable to the impacts of increasing climate variability and climate change. The country’s high rate of deforestation, especially for a growing agriculture and livestock sector, is significant. More frequent extreme events such as intense rainfall and heat waves are increasingly common, negatively impacting all sectors. Additionally, a significant increase in total annual rainfall has been reported for the summer months of November to December, corresponding with ENSO (El Niño Southern Oscillation) events, which are also associated with floods. La Niña events bring the increasing occurrence and intensity of droughts.

Nationally Determined Contributions to the UNFCCC in 2016 and its Third National Communication (NC3) in 2017, in support of the country’s efforts to realize its development goals and increase its resilience to climate change by enhancing mitigation and adaptation implementation efforts.11 Adaptation is a priority in the National Development Plan (2014–2030) across the following sectors: water resources, forests, agriculture and livestock production, territorial planning, energy, infrastructure, health, disaster risk management and early warning systems.