Uruguay Economy

Uruguay Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax System

Basic data

The country is characterized by a stable and transparent environment for exports and investments, a long-term consistent economic plan of the government. Over the past fifteen years, Uruguay has redirected part of its foreign trade to China and the EU in order to reduce the risks arising from the economic problems of Argentina and Brazil and to be less sensitive to external shocks. Although the diversification of the economy is greater than that of other countries in the region, it is still heavily dependent on the export of agricultural raw materials. The new administration is determined to implement the steps of the “Western liberal style” (liberalization of trade, greater support for SMEs by loosening bureaucracy and reducing obstacles, digitization, emphasis on new technologies, etc.).

According to cheeroutdoor.com, Uruguay is one of the few countries in South America that maintained economic growth for a long time until the start of the pandemic. In 2020, however, Uruguay’s economy shrank by 6%, still one of the lowest declines in South America. Nevertheless, a return to the values ​​of 2019 is expected only in 2023. According to data from the National Statistics Office (INE), unemployment has increased from 9.2% to 11%, the poverty rate is also approximately 11%. Year-on-year inflation already rose to 10% at the beginning of 2022.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 0.3 -5.4 4.2 3.3 3
GDP/population (USD/PPP) 23,455.70 22,283.00 23,870.00 25,610.00 26,960.0
Inflation (%) 7.9 9.8 7,8 10.2 6.5
Unemployment (%) 8,9 10.5 9.4 7.3 7.2
Export of goods (billion USD) 7.7 6.8 9.5 11.7 12.1
Import of goods (billion USD) 8.3 7.6 10.3 11.6 11.8
Trade Balance (Billion USD) 3.1 2.1 3 4.9 5.2
Industrial production (% change) 1.2 -3.9 7.7 4.5 2.6
Population (millions) 3.5 3.5 3.5 3.5 3.5
Competitiveness ON ON ON ON ON
OECD export risk 03.VII 03.VII 03.VII ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -3.6
Public debt (% of GDP) 75.4
Current account balance (billion USD) -1.6
Taxes 2022
F.O 10-36%
VAT 10 and 22%

GDP is expected to grow in the coming years, but the fiscal deficit will remain above the level necessary to stabilize the debt. Budget balances can be expected in the following years as well, but significantly smaller than during the coronavirus pandemic.

The foreign debt has increased greatly over the last ten years, at the beginning of 2022 it was at the level of 76% (56% in 2011).

Banking system

The Uruguayan peso is freely convertible without any restrictions. There are no restrictions on the export or import of foreign exchange and currencies. The issuing bank is Banco Central del Uruguay. The functioning of the banking system and the requirements that local banks must fulfill are regulated by Law No. 15,322 of 1982 (Sistema de Intermediacion Financiera).

Overview of the most important financial institutions

State banks:

Banco de la República Oriental del Uruguay – BROU (public bank)
Banco Hipotecario de Uruguay (BHU) – state commercial bank

Private banks:

Banco de la Nación Argentina
Banco Itaú (taken over by Bank Boston)
Banco Santander
Banco Bandes
Banco Bilbao Vizcaya
Banco Heritage
Scotiabank Uruguay

Tax system

The National Tax Directorate of the DGI is the main organization of the Uruguayan tax system. The DGI assigns each taxpayer a twelve-digit code labeled RUT (Registro Único Tributario).

The most important taxes

Profit tax – Impuesto de Rentas de las Actividades Económicas (IRAE)

It burdens business and production activities, it is similar to our tax on the profit of legal entities. It is a direct tax set at 25%.

Value Added Tax – Impuesto al Valor Agregado (IVA)

Similar to VAT in the Czech Republic. Practically all services and goods are taxed, only some basic foodstuffs, printed matter and books are exempted. Two basic IVA rates are used:

  • 22% – services, consumer goods, some foodstuffs
  • 10% – selected foodstuffs (e.g. coffee, flour, oil, sugar, tea, butter, etc.), fuel and land transport.

Special internal tax – Impuesto Específico Interno (IMESI)

IMESI rates, which are similar to consumption tax in the Czech Republic, differ depending on the type of goods or services. They are subject to, for example: alcohol – 85%; tobacco products – 70%; lubricants – 15-35%; cars, motorcycles – 25-30%; beer – 27%; wine – 23%; water, soda – 22%; cosmetics – 20%; electrical energy – 10%; soft drinks – 10%; fuel – rates vary by type.

When importing goods to Uruguay, local importers must pay a value added tax (IVA) of 22% of the value of the goods, plus a 5% fee, which is actually customs (tasa consular, imports from Mercosur countries are not affected). After the realization of the sale, he will then pay the remaining 25% of the profit tax (IRAE) in the specified period. Personal taxes El Impuesto a las Retribuciones Personales, including pensions, 2.25 – 6.25%. El Impuesto a la Renta de las Personas Físicas, IRPF: from working capital 7-12%, from labor the rate is graduated (up to 36%). Non-residents pay taxes of 7-12%.

Uruguay Economy