Economic Overview

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 2022, GDP increased by an estimated 5.3%, mainly due to an increase in tourism and in agricultural production.The economy is expected to continue growing in the coming years, albeit at a slower pace, with the IMF predicting growth of 3.6% for 2023 and 2.7% for 2024.

In 2022, inflation remained above the target of 7%, reaching an estimated 9.1%. However, that rate should decrease in 2023 and 2024, to 7.8% and 6.4%, respectively. Public debt decreased to 61.2% of GDP in 2022, but it's expected to increase to 62.6% in 2023 and 63.9% in 2024. Moreover, the fiscal deficit slightly increased to 2.7% in 2022, but it should slightly fluctuate in the coming years, reaching 2% in 2023 and 2.3% in 2024. Furthermore, the current account went into an estimated 1.2% deficit in 2022, and that rate is expected to increase to 1.9% in 2023 and 2% in 2024. 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. Although the pandemic has impacted the Uruguayan economy, it had relatively little impact when compared to other countries in the region. Still, 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 decreased to 7.9% in 2022, as the country recovered from the impacts of the pandemic, and it should remain stable in 2023 and 2024.

Foreign Trade

Uruguay has an open economy and foreign trade represents 56.8% of the GDP. The country mainly exports meat (21%), soya beans (9.4%), wood (7.4%), milk and cream (5.8%), and electrical energy (5.5%). The main imports include petroleum oils (13.1%), motor vehicles (6.5%), telephone sets (2.6%), insecticides (2.1%), and mineral or chemical nitrogenous fertilisers (2%). According to IMF Foreign Trade Forecasts, the volume of exports of goods and services increased by 14.4% in 2022, while the volume of imports of goods and services increased by 20.9%.

Uruguay's main trade partners are China, Brazil, Argentina, the United States, Nigeria, and the Netherlands. The Uruguayan economy is based on industry, trade and banking services (in the capital Montevideo), as well as agriculture, livestock farming (in the centre of the country) and tourism (in the East). Uruguay is a founding member of MERCOSUR, upon which it strongly depends. The country is also a member of ALADI, a trade association that includes ten South American countries as well as Cuba, Mexico, and Panama. Under ALADI’s Economic Complementation Agreements, Uruguay enjoys and grants special preferential access to trade with Bolivia, Chile, Colombia, Cuba, Ecuador, Mexico, Peru, and Venezuela. Additionally, trade relations with Argentina and Brazil are extremely important, as those countries account for over half of Uruguay’s exports and imports, combined.

As Uruguay mainly exports agricultural products, they are highly vulnerable to international price fluctuations. In 2021, the country's exports of goods amounted to USD 9.5 billion, while imports totalled USD 10.3 billion. As for services, imports equalled USD 3.9 billion, while exports reached USD 3.7 billion. As a result, the country had a trade surplus in terms of goods of USD 3.9 billion and a trade surplus including services of USD 3.7 billion.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Uruguay please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.