Paraguay's capital Asuncion was paralysed on Wednesday by a nationwide strike against the privatisation plans of President Horacio Cartes.

The strike stopped transport services and closed schools and most businesses in the south American country, said union leader Aldo Snead.

The unions want Mr Cartes to roll back a law enabling private companies to invest in government infrastructure.

They are also demanding 25 per cent pay raises and more access to credit for poor people to start businesses.

Public Works Minister Ramon Jimenez said the sell-off plan included the international airport that serves Asuncion, state-owned water treatment plants and the construction of toll roads linking the capital with Brazil, Argentina and Bolivia.

It also affected the agency that dredges the Paraguay river and keeps the landlocked country with a navigable sea outlet.

President Cartes acknowledged that Paraguay's workers have legitimate complaints, but has shown no sign of backing down.

Groups from six national trade unions, farmer's organisations across the country, youth from the National Union of Students and left-wing political parties all supported the protest.

Thousands of peasants arrived in lorries to join trade unionists in a protest that covered the entire city.

CUT union leader Bernardo Rojas said the strike had been widely supported by 80 per cent of union members.

And National Farmers Federation spokesman Marcial Gomez described it as a victory for peasants and indigenous people and their demands for land reform, an end to murders of rural leaders and repeal of the privatisation laws.