Villarrica (vē´yärē´kä), city (1992 pop. 27,818), capital of Guairá dept., SE Paraguay. It is a commercial center and shipping point in a region that produces cattle, tobacco, maté, cotton, footwear, leather products, sugarcane, lumber, wine, and citrus fruits. A large portion of the population is of German descent. Villarrica's cathedral is a pilgrimage center.