Uruguay’s economy is expected to rebound strongly in 2024, with the International Monetary Fund (IMF) predicting a 3.7% growth driven by a surge in agricultural exports and balanced macroeconomic risks. 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.
Despite facing historic droughts in 2022 and 2023, Uruguay has seen an economic recovery, 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. Inflation 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. However, political challenges loom as President Luis Lacalle Pou nears the end of his term in office. Amidst political scandals and a competition for leadership succession, Uruguay is navigating through economic challenges with hopes for a strong recovery.