Uruguayan Economic Outlook 2030: What Challenges Do Companies Face Under the New Government?
TMF Group organized an event to analyze the Uruguayan economic outlook and future business trends, with Ignacio Munyo participating.
TMF Group, a leading global provider of administrative services, hosted the conference “Uruguay 2030: The Challenges of the New Government,” featuring economist Ignacio Munyo, Executive Director of CERES. The event, held at the Uruguay Golf Club, examined the opportunities and challenges businesses will face in the coming years.
Munyo began his presentation by reviewing Uruguay’s economic growth, highlighting an average growth rate of 3% over the past 40 years. However, this growth has not been uniform. In times of “tailwinds,” characterized by low interest rates and high commodity prices, Uruguay grew by nearly 6%, whereas under adverse conditions, it contracted by 2%. In neutral scenarios like the present, growth hovers around 1%, posing a significant challenge for the next government, which will need to find ways to stimulate economic expansion under these circumstances. Given this context, the Uruguayan economic outlook remains uncertain, requiring strategic policies to drive sustainable growth.
The International Context: Slowdown and High Interest Rates
Regarding the global situation, Munyo pointed out that the United States, Europe, and China are all experiencing economic slowdowns and stagnation. In the case of the United States, he noted that while instability persists due to cuts in international aid and trade wars, Uruguay maintains a favorable trade relationship, which positions the country advantageously if tariffs are reviewed on a case-by-case basis.
A positive development for Uruguay was the U.S. decision not to support a global tax initiative, which could have negatively impacted Uruguay’s existing investment promotion schemes and special regimes (such as Free Trade Zones). However, high international interest rates, hovering around 5%, pose a significant challenge for attracting investment.
Regarding commodity prices, he described the Uruguayan economic outlook for this year as neutral. Only the meat and dairy sectors show potential for price increases. On the other hand, the decline in oil prices following Trump’s victory benefits the Uruguayan economy.
Domestic Challenges: Competitiveness and Productivity
Discussing GDP, Munyo noted that it grew by 3.1% last year and highlighted that a private sector expectations survey conducted by the Central Bank of Uruguay (BCU) projects a 2.5% growth rate for this year. He pointed out that in 2024, the GDP was driven by two extraordinary factors: the new UPM plant and an exceptional soybean harvest. However, these factors will not have the same impact this year, influencing the Uruguayan economic outlook.
Regarding the exchange rate, Munyo stated that the current dollar value presents a competitive issue, making exports more expensive and hindering investment attraction. To counteract this, he proposed five key measures: improving international market access, adjusting tax incentives, simplifying bureaucracy, modernizing labor regulations, and reducing production costs.
Regarding inflation, which currently stands at 5.1% and is projected to reach 5.8% by the end of this year, he highlighted a positive sign that the new government’s initial indications suggest it will not exceed the upper limit of the target range. He asserted that this goal will be achievable if the exchange rate remains around $45 by the end of 2025.
One of the most revealing points was that for Uruguay to achieve sustained growth, the country needs to increase its investment rate from 17% to 24% of its GDP. This would require attracting $4.5 billion in investments. To put this into perspective, Uruguay’s largest-ever investment, the UPM 2 plant, was $3.5 billion. Strengthening investment is crucial to Uruguay’s economic outlook for the coming decade.
Forestry, Technology, and Emerging Markets
Munyo emphasized the growth of the forestry and technology sectors, which started from scratch and successfully integrated into global markets through consistent policies and a long-term vision. Today, Uruguay stands on par with Finland and Denmark in these industries.
Although negotiations with Europe and Mercosur seem stagnant regarding economic openness, he identified opportunities in emerging markets such as Vietnam, the Philippines, Indonesia, Malaysia, and India, with which Uruguay currently has minimal trade relations.
He highlighted Saudi Arabia as a rapidly growing country that will host major global events, including the 2034 FIFA World Cup, and has a strong demand for food. He also noted Uruguay’s participation in this year’s World Expo in Osaka as an opportunity to access the Japanese market. These developments could shape the Uruguayan economic outlook by opening new trade avenues.
The Major Challenge: Fiscal Deficit and State Reform
Munyo pointed out that the fiscal deficit remains a persistent issue, limiting the government’s ability to invest in critical areas such as child poverty and security. Given that there is no room to increase debt or taxes, improvements in quality of life will depend on a more efficient state.
To achieve this, he emphasized the need for improved coordination of public policies (for example, there are currently more than 500 programs focused on childhood and adolescence) and reforms to the administrative career structure.
“This is where the real challenge lies, and the new government faces its greatest test. The functioning of the state must be addressed, as it is too dysfunctional for its level of importance. This is a fundamental condition for advancing investment, growth, and, consequently, all the public policies needed to improve the quality of life in Uruguay,” he concluded. A more effective state structure will be essential in shaping the Uruguayan economic outlook beyond 2030.
A Conference Held Amid a Major Acquisition
The Uruguay 2030 event took place against the backdrop of the TMF Group’s recent acquisition of Auren S.C.’s operations in Uruguay. This move enhances the firm’s accounting, taxation, payroll, and entity management capabilities, thereby consolidating its growth strategy in the Latin American and global markets.
Following this merger, TMF Group has a team of over 220 professionals in the country, with a client portfolio comprising more than 1,200 companies across key sectors such as agribusiness, construction, and logistics. As global firms continue to invest, the Uruguayan economic outlook will largely depend on maintaining a favorable business environment and regulatory stability.