Skyline at night in Uruguay

Uruguay Economic Forecast

Uruguay Economic Outlook

High-frequency data suggests that the economy slowed further in Q4. Both industrial production and merchandise exports contracted in the quarter as global headwinds intensified. Meanwhile, survey data indicates that retail activity was broadly unchanged from its Q3 levels. Turning to Q1 2023, the economy is seemingly gaining momentum. Merchandise exports returned to growth in January, while industrial activity benefitted from lower producer prices in January and February. Moreover, private spending is likely to pick up thanks to the ongoing downtrend in consumer price inflation. Going forward, households’ purchasing power should enjoy additional tailwinds: On 2 March, President Lacalle proposed a broad-based tax cut worth around USD 150 million, which is set to affect 75% of taxpayers.

Uruguay Inflation

Inflation eased to 7.6% in February from January’s 8.0%. February’s decline was chiefly driven by a slowdown in food and transport inflation. That said, prices for housing and utilities increased at a sharper rate. Inflation is seen easing in the coming months but still ending the year above the Central Bank’s 3.0–6.0% target range.

Uruguay Economic Data

2017 2018 2019 2020 2021
Population (million) 3.5 3.5 3.5 3.5 3.5
GDP (USD bn) 64.3 64.5 61.2 53.6 59.3
GDP per capita (USD) 18 18 17 15 16
GDP (UYU bn) 1 1 2 2 2
Economic Growth (Nominal GDP, ann. var. %) 6.7 7.6 8.9 4.2 14.8
Economic Growth (GDP, ann. var. %) 1.6 0.5 0.4 -6.1 4.4
Domestic Demand (ann. var. %) 1.9 1.0 -0.3 -4.6 5.4
Private Consumption (ann. var. %) 3.6 2.1 0.5 -6.9 2.3
Government Consumption (ann. var. %) 1.3 2.6 1.1 -7.3 8.0
Fixed Investment (ann. var. %) 0.4 -9.0 0.8 1.6 15.2
Exports (G&S, ann. var. %) 4.9 -1.7 3.6 -16.0 14.4
Imports (G&S, ann. var. %) 7.1 0.0 1.5 -12.0 20.9
Industrial Production (ann. var. %) -11.0 10.7 -1.6 -5.2 12.3
Unemployment (% of active population, eop) 6.9 8.4 8.5 10.6 7.0
Unemployment (% of active population, aop) 7.9 8.4 8.9 10.4 9.3
Fiscal Balance (% of GDP) -3.3 -2.7 -3.2 -5.2 -3.6
Public Debt (% of GDP) 60.9 62.9 64.4 75.1 73.4
Inflation (CPI, ann. var. %, eop) 6.6 8.0 8.8 9.4 8.0
Inflation (CPI, ann. var. %, aop) 6.2 7.6 7.9 9.8 7.7
Inflation (PPI, ann. var. %, aop) 1.7 9.7 12.8 10.5 14.4
Monetary Policy Rate (%, eop) 9.25 9.25 9.25 4.50 5.75
Average Deposit Rate (%, aop) 5.56 5.30 5.86 4.37 3.71
Exchange Rate (UYU per USD, eop) 28.83 32.42 37.33 42.36 44.72
Exchange Rate (UYU per USD, aop) 28.66 30.71 35.24 42.01 43.57
Current Account Balance (USD bn) 0.0 -0.3 0.9 -0.5 -1.6
Current Account Balance (% of GDP) 0.0 -0.5 1.5 -0.9 -2.7
Merchandise Trade Balance (USD bn) 2.0 2.4 3.1 2.2 4.5
Merchandise Exports (USD bn) 11.1 11.8 11.9 10.1 15.7
Merchandise Imports (USD bn) 9.2 9.4 8.8 7.9 11.2
Merchandise Exports (ann. var. %) 4.8 5.9 0.7 -15.2 56.0
Merchandise Imports (ann. var. %) 7.0 2.5 -6.8 -9.7 41.9
Foreign Direct Investment (USD bn) -0.6 -0.1 2.0 0.6 1.6
International Reserves (USD bn) 16.0 15.6 14.5 16.2 17.0
International Reserves (months of imports) 20.9 19.9 19.9 24.6 18.1
External Debt (USD bn) 42.3 43.0 45.2 47.1 48.7
External Debt (% of GDP) 65.8 66.7 73.8 87.9 82.2

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