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Asuncion is the capital and largest city of Paraguay. Asuncion is the home of the national government, principal port, and the chief industrial and cultural centre of the country. Local manufacturing production includes footwear, textiles, and tobacco products.Paraguay is in Central South America, northeast of Argentina. Subtropical to temperate; substantial rainfall in the eastern portions, becoming semiarid in the far west. Grassy plains and wooded hills east of Rio Paraguay; Gran Chaco region west of Rio Paraguay mostly low, marshy plain near the river, and dry forest and thorny scrub elsewhere.The main languages are Spanish, Guarani. The main religions are Christianity.Paraguay has a market economy characterized by a large informal sector. Agriculture dominates the economy, but unequal land distribution has resulted in a large class of peasant farm labourers. A large portion of the population is uninvolved in the formal economy, instead existing as subsistence farmers.The population is 2.3 Mil (2014 est.), while the iinflation rate is 6.4% (2014 est.).