In April 2018, the Colorado Party again won the presidential election, and Mario Abdo Benítez became president in August 2018. However, his party does not have a majority in the Senate and is split into two factions.
In 2019, the Paraguayan economy stagnated due to lower agricultural yields caused by adverse weather and lower energy production. However, the economic impact of the COVID-19 pandemic was moderate. The government reacted relatively quickly to the pandemic and tried to mitigate the economic consequences by making the fiscal stability requirements more flexible and taking on more foreign debt.
President Abdo managed to push through a small reform to simplify the tax system but did not raise the very low taxes in Paraguay. A larger controversy emerged regarding a treaty with Brazil over the binational hydropower plant Itaipú, as a 2019 secret agreement on the operating conditions caused public protests when it came to light, almost leading to Abdo’s impeachment and resulting in plummeting rates in public approval.
