The Government maintained inflation projections and cut down the expected growth for 2023

He Executive power presented this Friday the macroeconomic projections for the rest of the government period, as part of the message and explanatory statement that make up the report of the Accountability.

In this context, the authorities expect the Uruguayan economy to grow 1.3% in 2023, that is, almost one point below the previous projection made in February (2%), and which had already been cut from 3%. This mainly because of impact of drought on economic activity, and especially in agricultural areas.

“The leading indicators for the second quarter show mixed signals, as a result of the negative impact that the drought, the most serious in the last century, is having, both in duration and severity”, says the report.

On the other hand, it shows that the progress of the road works, the start-up of the second UPM plant, the recovery of external demand and the recovery of real wages “support a growth projection of more than 3% per year in 2024″.


The economic team maintained the inflation projection for 2023, which stands at 6.7%, similar to what was stipulated in the previous Accountability.

Private analysts project a price increase of 6.95% for the calendar year ended in December according to the latest survey of Economic Expectations of the Central Bank (BCU). Inflation was 7.1% year-on-year in the year ending in May.

The official projections for the following years are 5.8% for 2024, and of the same magnitude for 2025, that is, within the target range (3% to 6%).

These new projections of expected inflation are relevant, because they are the basis of the nominal adjustments suggested by the government in the new guideline for the salary negotiation of some 660,000 workers.

The last rounds of negotiations and in different governments have encountered doubts, both from unions and companies, about compliance with future inflation projections as an obstacle. It is that behind it there is a long history of non-compliance with those goals.

This usually affects the negotiation climate and it makes activity groups seek to include different shielding mechanisms in their agreements, for example, the payment of corrections every six months and not every 12 months as suggested by the Executive Power.


With respect to Work market, the report estimates that the number of employed persons will have a recovery of 1.2% this year, which is equivalent to 20,000 more positions. By 2024, the government projects that the employed population will be 1.7 million, which implies an increase of 20,000 people compared to 2023.

The Government maintained inflation projections and cut down the expected growth for 2023


Exchange rate

By the end of 2023, the value of the exchange rate it is estimated at $39.07 per dollar, with a fall of 2.5% compared to 2022. In 2024 it would recover and reach $41.7 (+6.7%). Meanwhile, by 2025 it is estimated that the value of the dollar would rise again with a price of $43.8 (+5%)

The variation in the exchange rate is not a policy goal but a working assumption on which the budget strategy is drawn up, clarifies the report.

Fiscal deficit

The government hopes to close 2023 with a fiscal deficit observed overall 3.3%, without income to the Social Security Trust (FFS). And the structural fiscal result is projected at -2.7% of GDP.

In 2024, it is estimated to close with an effective fiscal deficit of 2.6% of GDP, which, in structural terms, would be equivalent to a deficit of 2.6% of GDP.

The Government maintained inflation projections and cut down the expected growth for 2023


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