Uruguay’s economy grew 1.8% in 2025, falling short of official forecasts
Economy Minister Gabriel Oddone acknowledged last week that economic activity is running below expectations and signaled a likely downward revision of 2026 growth projections, currently set at 2.2%
Uruguay’s economy grew 1.8% in 2025, according to national accounts data published by the Central Bank of Uruguay (BCU). The result fell nearly a full percentage point below the 2.6% forecast included in the government’s budget law and was also lower than the 2.5% estimated by the International Monetary Fund.
Gross domestic product edged up just 0.1% in the fourth quarter compared to the third on a seasonally adjusted basis, with an equally marginal gain against the same period in 2024. The year-end was weighed down by a 7.7% drop in the agricultural sector, hurt by lower summer crop yields, reduced timber production, and a decline in live cattle exports.
Over the course of 2025, manufacturing was one of the main drivers of growth, expanding 6.2%. The result was largely fueled by increased activity at the Ancap refinery — which had been partially shut down for maintenance in 2024 — along with the food industry and, to a lesser extent, cellulose production. Commerce, lodging, and food services grew 1.9%, while financial services expanded 4.2%.
On the other hand, construction fell 2.5% due to lower infrastructure spending, and the energy sector contracted 3.1% as a result of reduced renewable power generation.
Economy Minister Gabriel Oddone acknowledged last week that economic activity is running below expectations and signaled a likely downward revision of 2026 growth projections, currently set at 2.2%. Oddone noted the government may consider fiscal measures, including postponing certain spending commitments, while seeking to protect social programs.
Analysts surveyed in the BCU’s March expectations poll cut their forecasts and now expect growth of 1.6% for 2026. Economist Aldo Lema warned that the cooling began before factors such as the drought or the deteriorating international environment, attributing it instead to weaker external demand — particularly from the region — tax adjustment announcements, competitiveness problems, and restrictive monetary policy.
Consulting firm Exante noted that while fourth-quarter figures did not confirm a recession scenario, they did reflect economic stagnation, and that the 1.8% growth was explained entirely by a statistical carryover effect.
The Center for Development Studies (CED) warned that without raising its growth rate, Uruguay cannot aspire to higher levels of well-being. The BCU also revised 2024 growth upward, from 3.1% to 3.3%.
