Uruguay GDP Growth Forecast Slashed to 1.3% as Global Tensions and Regional Slowdown Converge

The April median forecast of 1.3% represents a sharp contraction from March’s 1.6% projection, with individual analyst estimates ranging from 0.3% to 2.03%. This stands significantly below the government’s maintained 2.2% target, though Economy Minister Gabriel Oddone has acknowledged a high likelihood of downward revision. The 2027 outlook has similarly deteriorated from 1.85% in March to 1.7% in April, with forecasts spanning 1.3% to 3.2%. The 2028 projection holds steady at 2.0% in median terms.

The International Monetary Fund reduced its Uruguay growth forecast to 1.8% for 2026, down from October’s 2.4% estimate, and projects 2.6% expansion for 2027. The IMF’s global economic outlook warns that the Middle East conflict will subtract at least two-tenths from worldwide growth, bringing it to 3.1% under a base scenario assuming the conflict does not extend beyond the second half of 2026. Under more adverse scenarios, global growth could fall to 2.5% or 2.0%, with emerging markets experiencing nearly double the impact of advanced economies. Chief Economist Pierre-Olivier Gourinchas compared the oil supply disruption from Iran’s Strait of Hormuz closure to the 1974 oil shock, though noted reduced petroleum dependency in current global production.

Inflation expectations remain anchored near the Central Bank’s 4.5% target, with April surveys projecting 4.5% for 2026 and 4.55% for 2027, practically unchanged from prior months. Exchange rate forecasts show minimal movement, with analysts expecting the dollar to reach 41 Uruguayan pesos by year-end 2026, up from 40.95 in the previous survey, and 42 pesos by end-2027. The 24-month inflation outlook of 4.5% holds particular significance as the Central Bank’s reference point for calibrating its 5.75% benchmark interest rate.