Paraguay has a struggling commercial sector, which affects the economy, but agriculture economy proves to be the supportive pillar of the Paraguayan economy.

Paraguay has immense hydroelectric resources that include, the world's second largest generation plant operated and built together with Brazil. The government is initiating various plans for foreign investors and also national treatment is accorded to the foreign investors, but the disease called corruption is spread everywhere in Paraguay. The Paraguayan economy has the advantage of young population, but extremely bad political instability and mineral resources have affected the economic benefits. The export of grains, timber, cotton, sugar, cattle, and products that are re-exported to Argentina and Brazil are helping the economy of Paraguay. The economy is related to the vulnerable changes in the weather and the economic fortune of Brazil and Argentina.

Agricultural activities are mainly for export purpose, which consist of 16% of GDP and one-quarter work force is employed. 2500 families are associated and dependent on subsistence farming and are tied marginally to the large productive system of the economy. Paraguay has a commercial sector that deals with banking, professional services, and retail. The import of products from United States and Asia for re-export to Brazil, Argentina and other neighboring countries is a significant activity in Paraguay.

Paraguay's GDP is in a consistent dip from 2008, with an average decrease of 5%. The economy that is not included in the national accounts, which is an underground economy is twice larger than the formal economy. Government has to take efforts, to have an impact on the informal sector, which is affecting the economy.