- Real GDP growth is expected to reach 2.5 percent in 2025, driven by domestic demand and exports. Inflation is expected to remain around the central bank target of 4.5 percent.
- Macroeconomic risks are broadly balanced. Uruguay's economy remains sensitive to commodity price movements, global financial conditions, and regional developments, but ample liquidity buffers limit the risks. Upside risks include strong agricultural harvests, favorable commodity prices, or opportunities to access new markets, among others.
- Upgrades of the fiscal and monetary policy frameworks are welcome. Prudent fiscal and monetary policies and structural reforms will be key to ensure macroeconomic stability, boost productivity, competitiveness, and resilience to climate-related shocks.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Uruguay.36F [1] The authorities have consented to the publication of the Staff Report prepared for this consultation. [2]
Uruguay's economy grew strongly in 2024, at 3.1 percent. Agricultural production, which had been affected by a severe drought the previous year, and growing inbound tourism, also contributed to improving the external position. The output gap nearly closed and the unemployment rate ticked down while inflation fell to 4.2 percent in August 2025, below the central bank target. With inflation expectations also declining, the central bank started easing monetary policy in July. In 2024, the fiscal deficit of the central government, including social security, increased to 3.2 percent of GDP, necessitating the activation of the fiscal rule's escape clause. A new administration took over in March 2025, with an agenda that seeks to balance inclusive growth with macroeconomic stability.
Fueled by the post-pandemic recovery of real wages, a reduction in domestic uncertainty, and strong tourism flows earlier in the year, domestic demand and exports are expected to support real GDP growth in 2025, to 2.5 percent. Inflation is projected to converge around the central bank target of 4.5 percent, accompanied by a gradual easing of monetary policy. The current account deficit is expected to widen slightly to 1.7 percent of GDP in the medium term, in line with fundamentals. Macroeconomic risks are broadly balanced. Uruguay's economy remains sensitive to commodity price movements, global financial conditions, and regional developments. Ample liquidity buffers, long debt maturities, favorable borrowing conditions, and an increasing share of domestic debt issuances limit near-term fiscal risks, and systemic risks remain contained. Upside risks include strong agricultural harvests, favorable commodity prices, or opportunities to access new markets, among others.
Executive Board Assessment [3]
Executive Directors highlighted the resilience of Uruguay's economy to external shocks, which has been supported by sound macroeconomic policies. They welcomed the authorities' progress in upgrading the fiscal and monetary policy frameworks, which will further buttress economic stability, and underscored the importance of sustaining the reform momentum to boost sustainable and inclusive growth.
Directors welcomed the authorities' commitment to prudent fiscal policy and their five year budget plan to reduce the deficit and stabilize debt in the medium term. Noting that the fiscal deficit is expected to increase in 2025 due to fiscal inertia, they emphasized the importance of steadfast implementation of the fiscal rule. Directors underscored the need to deliver sustained fiscal consolidation to place debt-to-GDP on a steady downward path, including by considering additional fiscal efforts. They welcomed the proposed enhancements to the fiscal rule and the fiscal council, which are in line with previous IMF recommendations.
Directors concurred that the monetary policy stance has been appropriately tight. They encouraged the authorities to maintain this stance until inflation expectations and inflationary pressures have firmly converged to target. Directors welcomed the improvement in the central bank's monetary policy framework and communication strategy, and encouraged strengthening de jure central bank independence to further bolster credibility. They agreed that the exchange rate should continue to act as a shock absorber with FX interventions limited to respond to disorderly market conditions, and they welcomed the renewed de‑dollarization efforts.
Directors noted that the banking sector remains sound, well capitalized, and profitable. They welcomed the authorities' commitment to strengthening regulatory and supervisory frameworks, including through the implementation of the 2022 FSAP recommendations. Further strengthening AML/CFT effectiveness in line with FATF standards would also be important. Directors also encouraged developing the peso capital markets.
Directors recommended structural reforms to revitalize growth and boost productivity. They encouraged enhancing educational outcomes, bolstering human capital, and leveraging Uruguay's AI readiness. Directors also stressed the need to improve competitiveness, including by streamlining business regulations, facilitating trade, and removing regulatory bottlenecks. They welcomed the government's proposal for wage negotiations, which aims to boost low incomes while contributing to deindexation efforts. Directors also welcomed reforms to encourage labor force participation and facilitate the integration of migrants. Continued efforts to improve climate resilience were also encouraged.
Uruguay: Selected Economic Indicators, 2022–2026
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the Uruguay and the IMF page.
[3] At the conclusion of the discussion, the Deputy Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .
