Amidst political challenges and a competition for leadership succession, Uruguay is looking towards a strong economic rebound this year. The International Monetary Fund (IMF) predicts that the country’s economy will grow by 3.7%, driven by a surge in agricultural exports and balanced macroeconomic risks. This recovery comes after facing a historic drought in 2022 and 2023, which had an impact on the country’s economy.
Despite these challenges, Uruguay has seen an economic recovery, with easing financial conditions and robust private consumption attributed to salary updates and a reduction in the price gap of products from neighboring Argentina. The country is expected to see positive growth in the coming years, with inflation projected to increase in the second half of 2024. However, 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. As such, there are political scandals and competition for leadership succession that Uruguay must navigate through while working towards its economic goals.
In summary, despite facing historical droughts and political challenges, Uruguay is looking towards a strong economic rebound this year driven by agricultural exports and macroeconomic risks. The IMF forecasts positive growth with inflation projected to increase in 2024 but gradually easing rates to support it. President Luis Lacalle Pou’s term nears its end as he navigates through political scandals and competition for leadership succession while working towards de-dollarizing the economy.
