Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Uruguayan economy is significantly dependent on its neighbours, Brazil and Argentina. In 2021, GDP increased by an estimated 3.1%, mainly due to a rise in household spending and fixed investment, and well as an increase in exports of goods and services paired with a decrease of imports of goods and services. However, it should be noted that the pandemic had relatively little impact on the Uruguayan economy when compared to other countries in the region, which is why the country experienced a more modest economic recovery than its neighbours in 2021. Still, the economy is expected to recover in the coming years, with the IMF predicting growth of 3.2% for 2022 and 2.7% for 2023.

In 2021, inflation remained slightly above the target of 7%, reaching an estimated 7.5%. However, that rate should decrease in 2022 and 2023, to 6.1% and 5.4%, respectively. Public debt is at 67.5% of GDP, but it's expected to increase to 68.8% in 2022 and 70% in 2023. The fiscal deficit slightly decreased to 3.7% in 2021, and it should continue that downward trend in the coming years, reaching 3.2% in 2022 and 2.5% in 2023. Furthermore, the current account went into an estimated 1.3% deficit in 2021, but that rate is expected to decrease to 0.3% in 2022 and remain stable at 0.2% in 2023. The economy has diversified in the past few years with the development of the industry sector (particularly the paper industry), as well as commerce and services. The government's fiscal policies are focused on restoring business profitability as a way to encourage investment and foster economic growth. Its priorities include reducing the large fiscal deficit  through a programme involving austerity and rationalisation of public spending (particularly through a better management of state-owned companies), while maintaining benefits for the most vulnerable sectors. Other key elements are the commitment to open trade, the reform of labour relations, and regulatory and management changes in public enterprises. In 2021, the government continued implementing measures to counteract the economic crisis resulting from the pandemic, which included  the expansion of heath spending, relaxation of rules for claiming unemployment insurance, expanded assistance to the most vulnerable groups, and reduction of some tax and pension obligations. Overall, Uruguay's fiscal measures implemented to mitigate the impacts of the pandemic have been effective in boosting economic activity, which has been gradually recovering. Looking ahead, recovery should continue, albeit at a slower pace, due to the fading impact of a low base effect, tighter monetary policy and heightened inflationary pressures.



Uruguay has one of the highest levels of GDP per capita in South America and a developing middle class. The country has had strong political and social stability for years, backed by a consolidated democracy and strong legal security, which makes it attractive to investors. Furthermore, the population living below the poverty line has decreased significantly in the past decade, from 40% in 2004 to 6.2% in 2016, due to a solid social contract and economic openness. However, there is still room for improvement in terms of financial transparency. The unemployment rate remained stable at 10.4% in 2021, as the country recovered from the impacts of the pandemic. However, unemployment is expected to decrease in the coming years, reaching 9.2% in 2022 and 8.7% in 2023.

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