05.06.2026
Uruguay’s economy slowed in 2025 after the post-drought rebound of 2024, but the macroeconomic framework remains stable. Growth is expected to remain moderate in 2026–2027, supported by domestic demand, exports, agriculture and investment, while weak productivity and limited scale continue to constrain medium-term performance. Inflation remains within the Central Bank of Uruguay’s target tolerance band, helped by policy credibility and peso strength. Fiscal consolidation is expected to be gradual, but public debt is projected to rise in the near term. The external position remains broadly stable, supported by commodity exports and tourism, but exposed to energy prices, regional demand and climate shocks.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 1.8 | 1.6 | 1.9 |
| Inflation (%, yoy) | 4.7 | 4.9 | 4.6 |
| Employment rate (% of working-age population, 15+) | 60.5 | 59.6 | 59.3 |
| Fiscal balance (% of GDP) | -3.7 | -4.1 | -3.9 |
| Gross public debt (% of GDP) | 62.0 | 65.0 | 66.5 |
| Current account balance (% of GDP) | -0.4 | -0.6 | -0.5 |
Growth remains moderate
Uruguay’s real GDP growth slowed to 1.8% in 2025, after 3.3% in 2024. The slowdown reflected the fading of the post-drought rebound and the temporary shutdown of the country’s oil refinery, which weighed on manufacturing. Agriculture remained supportive, helped by improved soybean and corn yields, while exports and private consumption contributed moderately to growth.
Growth is projected at 1.6% in 2026 and 1.9% in 2027. Domestic demand, exports and investment should support activity, but the pace remains modest compared with peer economies. Uruguay’s small domestic market, ageing population, low investment and weak productivity growth continue to limit potential growth.
Inflation remains within the target band
Inflation remained contained in 2025, broadly within the central bank’s 3%–6% tolerance band. The decline in inflation reflected peso appreciation, lower food-price pressures and the credibility of Uruguay’s strengthened inflation-targeting framework.
Inflation is projected at 4.9% in 2026 and 4.6% in 2027, close to the 4.5% target midpoint. Well-anchored expectations should allow monetary policy to remain cautious but less restrictive if inflation pressures stay contained. Upside risks come from energy prices, food shocks, exchange-rate movements and global trade disruptions.
Fiscal consolidation remains gradual
The non-financial public sector deficit widened to 3.7% of GDP in 2025, driven mainly by higher current spending, goods and services, and social assistance outlays. The new five-year budget outlines a consolidation path, but achieving it will require sustained fiscal effort.
The fiscal deficit is projected to widen to 4.1% of GDP in 2026 before narrowing slightly to 3.9% in 2027. Public debt is projected to rise from 62.0% of GDP in 2025 to 66.5% in 2027 before stabilising later in the decade. Strengthening the fiscal rule and the fiscal council’s independence should help preserve credibility, but fiscal pressures remain significant.
External position remains broadly stable
The current account deficit narrowed to 0.4% of GDP in 2025, supported by stronger soybean, beef and dairy exports, higher services receipts and lower goods imports. Tourism also contributed to external stability, while foreign reserves remained comfortable.
The deficit is projected to remain small, at 0.6% of GDP in 2026 and 0.5% in 2027. However, Uruguay remains exposed to terms-of-trade shocks, higher energy prices, weaker demand from Argentina and Brazil, and climate-related risks affecting agriculture. As a net oil importer and commodity exporter, the external position is sensitive to both global energy prices and agricultural yields.
Overall outlook
Uruguay’s outlook remains stable but modest. Growth is expected to remain below 2% in 2026–2027, inflation should stay close to target, and the current account deficit is projected to remain small. The main challenge is fiscal: public debt is expected to rise in the near term, requiring credible consolidation and stronger spending efficiency. Sustained medium-term improvement will depend on productivity growth, private investment, human-capital development, innovation, climate resilience and deeper integration into global markets.
Sources:
World Bank, Uruguay Macro Poverty Outlook, April 2026.
International Monetary Fund, Uruguay: 2025 Article IV Consultation and Staff Report, October 2025.
International Monetary Fund, World Economic Outlook, April 2026.
Central Bank of Uruguay, Monetary Policy Committee decisions and inflation developments, 2025–2026.
Ministry of Economy and Finance of Uruguay, Budget and Fiscal Rule materials, 2025–2026.
