Amidst political challenges and a competition for leadership succession, Uruguay is navigating through economic challenges with hopes for a strong recovery. The International Monetary Fund (IMF) predicts a strong rebound in Uruguay’s economy this year, with a 3.7% growth driven by a surge in agricultural exports and balanced macroeconomic risks.
After facing a historic drought in 2022 and 2023, Uruguay has seen an economic recovery, with easing financial conditions and robust private consumption attributed to salary updates and a reduction in the price gap of products from neighboring Argentina. Despite the challenges faced during the drought, the country is expected to see positive growth in the coming years.
The IMF also anticipates an increase in cellulose production by UPM and the recovery of real wages, with a projected 2.9% improvement for 2025. Inflation in Uruguay is expected to increase in the second half of 2024, but the Central Bank (BCU) is gradually easing rates to support economic growth. The IMF emphasizes the importance of continued vigilance of monetary policy to build credibility and support efforts to de-dollarize the economy.
These economic forecasts come at a time when President Luis Lacalle Pou is nearing the end of his term in office, as the Uruguayan Constitution does not allow consecutive terms. However, despite these challenges, there are hopes for a strong recovery and continued progress towards building a more prosperous future for all citizens of Uruguay.