Uruguay is expected to see a strong economic rebound this year, with a projected growth rate of 3.7%. The surge in agricultural exports and balanced macroeconomic risks are the key drivers of this growth, according to the International Monetary Fund (IMF). Additionally, the IMF anticipates an increase in cellulose production by UPM and a recovery of real wages, with a projected 2.9% improvement for 2025.
Despite facing historic droughts in 2022 and 2023, Uruguay has seen an economic recovery due to easing financial conditions and robust private consumption attributed to salary updates and a reduction in the price gap of products from neighboring Argentina. 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. Amidst political scandals and a competition for leadership succession, Uruguay is navigating through economic challenges with hopes for a strong recovery.