As the drought of 2022 and 2023 came to an end, Uruguay has seen a remarkable economic recovery. The IMF predicts a strong rebound in the country’s economy this year, with a projected growth of 3.7%. The surge in agricultural exports, balanced macroeconomic risks, and the increase in cellulose production by UPM are some of the factors that will drive this growth.
Furthermore, the recovery of real wages is expected to continue with a projected 2.9% improvement for 2025. Despite facing challenges during the drought, Uruguay is expected to see positive growth in the coming years, thanks to easing financial conditions and robust private consumption attributed to salary updates and a reduction in the price gap of products from neighboring Argentina.
The Central Bank (BCU) is gradually easing rates to support economic growth, but inflation is expected to increase in the second half of 2024. The IMF emphasizes continued vigilance of monetary policy to build credibility and support efforts to de-dollarize the economy.
As President Luis Lacalle Pou nears the end of his term in office, Uruguay is navigating through economic challenges with hopes for a strong recovery. Amidst political scandals and competition for leadership succession, Uruguay’s economy continues to recover thanks to its robust agricultural sector and favorable macroeconomic conditions.
In summary, Uruguay’s economy is set for another round of growth this year driven by increased agricultural exports and cellulose production. Despite inflation concerns, monetary policy remains focused on supporting economic growth while building credibility for de-dollarization efforts. As political turmoil continues amidst leadership succession struggles, Uruguay remains hopeful for a strong economic rebound under new leadership.
