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Uruguay stands out in Latin America for being an egalitarian society and for its high income per capita, low level of inequality and poverty and the almost complete absence of extreme poverty. In relative terms, its middle class is the largest in America and represents more than 60% of its population.

Sound macroeconomic management and favorable external conditions supported an economic expansion that has lasted for two decades, except for the COVID-19 that induced recession in 2020. The country experienced robust economic growth coming out of the pandemic and, thanks to prudent fiscal management, currently enjoys the lowest sovereign spreads in the region.

The economy grew by 4.9% in 2022. GDP growth is expected to decelerate to 1.5% in 2023 due to a historic drought but is projected to recover to 3.2 % in 2024. The percentage of households living in poverty currently stands at 6.4%, measured using the US$6.85 per capita per day international poverty line. This figure is 1.3% points higher than the levels recorded before the pandemic.

Despite its economic and social stability, significant social and economic disparities still persist, due to structural limitations that prevent the country from further closing development gaps. Lagging education outcomes, a weak integration into global trade, an insufficiently competitive environment, shallow financial markets, and chronically high inflation rank among the most relevant.

A record drought that affected agricultural production and the provision of drinking water in the capital, Montevideo underscores Uruguay’s reliance on its natural capital and its exposure to climate change.

Uruguay is a pioneer in financial instruments that reward climate action, such as the issuance of a sustainability-linked bond in 2022, with concessional financial conditions linked to the overaccomplishment of selected Nationally Determined Contribution (NDC) targets. Nowadays, the country is working to extend innovative climate-finance arrangements to lending from multilateral financial institutions.

Last Updated: Sep 28, 2023


Uruguay: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

Additional Resources

Country Office Contacts

URUGUAY +5982 905-2300
Victoria Plaza Office Tower – Plaza Independencia 759, 14 floor - Montevideo