Uruguay’s annual inflation rebounded to 3.16% in April after a monthly print of 0.54%, returning to the 3-6% Banco Central del Uruguay tolerance band the country had broken below in March for the first time in 33 months.
The April BCU Encuesta de Expectativas published this week cut 2026 GDP growth to 1.3% from 1.6% in March, while keeping the year-end inflation forecast at 4.5% and the 24-month forecast at the same level.
The fuel shock is the dominant driver, with the government raising gasoline 7%, diesel 14%, and supergás 7% effective May 1 (the second consecutive monthly hike) as the Middle East conflict pushed Brent crude above US$100 per barrel through April.
Key Points
— April IPC: 0.54% monthly, 3.16% annual; back inside the 3-6% BCU tolerance band.
— BCU April expectations survey cuts 2026 GDP growth forecast to 1.3% from 1.6%.
— Fuel shock: gasoline +7%, diesel +14%, supergás +7% effective May 1 — second monthly hike.
— Inflation expectations median: 4.5% at 12 and 24 months — anchored at BCU target.
— Uruguay’s gasoline at US$2.192/liter — most expensive in Latin America.
What the BCU Survey Said
The Rio Times, the Latin American financial news outlet, reports that the April BCU Encuesta de Expectativas, the monthly survey of analysts, banks, and AFAP funds, paints a picture of slower growth and persistent inflation pressure. The 25-strong panel cut its 2026 GDP forecast to 1.3% (median) from 1.6% in March, with dispersion ranging from 1.50% to 2.30%, while the 2027 forecast moved to 1.85% and 2028 to 1.92%, signaling expectations of a broadly muted growth path. Earlier projections from July had Uruguay growing 2.47% in 2026.
Inflation expectations held steady: 4.5% for 2026 (up only marginally from 4.4% in March) and 4.5% for 2027, both anchored to the BCU’s 4.5% target. The currency forecast moved to USDUYU 39.33 for end-June 2026, 40.19 for end-2026, and 41.46 for end-2027 in median terms. The Letras de Regulación Monetaria yield curve has been moving up in recent weeks, signaling investors are pricing in higher inflation expectations going forward.
The Fuel Pass-Through
The April IPC reflected the first monthly fuel adjustment of the cycle: gasoline and diesel rose 7% on April 1 (the maximum under the standard government smoothing band of −7% to +7%), and supergás rose 7%. Transport prices contributed 2.98% to the monthly print and the gasoline-supergás complex contributed another 0.66%. The May 1 second hike, with gasoline +7%, diesel +14% (above-band escape clause), and supergás +7%, will feed into the May IPC and signal continued upward pressure on the 12-month rate.
Why Uruguay Has the Region’s Most Expensive Gasoline
Uruguay’s gasoline price reached US$2.192 per liter on May 4, ahead of Perú in second place at US$1.59 per liter and well above the regional average of US$1.31. The brecha widened sharply from early April: Uruguayan gasoline rose US$0.127 per liter (6.15%) versus a regional average of US$0.04 (3.125%) and a global average of US$0.03 (2.05%). The gap reflects ANCAP’s pricing methodology, which references the US Gulf Coast, and the government’s willingness to apply the +7% escape clause band twice in two months given the international oil shock.
Energy minister Fernanda Cardona has publicly defended the absorption strategy, noting the “country effort to genuinely not transfer the cost increases to consumers”. URSEA‘s PPI report for the period March 26 to April 25 showed import-parity prices rising 5.92% for Súper 95 gasoline, 10.53% for diesel 50S, and 3.96% for supergás. The relative absorption is large, with the government taking some of the hit through ANCAP rather than passing through the full international increase, but the absorption capacity is finite, and the combination of US-Iran memorandum prospects and Brent’s 6.8% drop on May 6 to US$95.23 per barrel could trigger a reverse adjustment in June.
| Indicator | Value |
|---|---|
| April IPC monthly | 0.54% |
| 12-month inflation | 3.16% |
| BCU tolerance band | 3-6% (target 4.5%) |
| 2026 GDP growth (BCU survey) | 1.3% (cut from 1.6%) |
| 2026 inflation expectation | 4.5% (12 and 24 months) |
| USDUYU end-2026 forecast | 40.19 |
| May 1 fuel hike (nafta/gasoil/supergás) | +7% / +14% / +7% |
| Gasoline price (May 4) | US$2.192/liter (most expensive in LATAM) |
Connected Coverage
For broader context on Latin American inflation and FX dynamics, see our coverage of Chile’s April IPC preview as fuel-driven inflation breaks through the 3% target and our analysis of Peru’s 3.73% April reading and Velarde’s fiscal hemorrhage warning.
What Happens Next
- End May 2026: May IPC reading will capture the second consecutive fuel hike effect.
- June 2026: URSEA PPI determines whether the post-Iran war oil drop allows a fuel price cut.
- End May: BCU monetary policy review and updated expectations survey.
Frequently Asked Questions
What did the BCU expectations survey show?
The April BCU Encuesta de Expectativas, surveying 25 analysts, banks, and AFAP funds, cut Uruguay’s 2026 GDP growth forecast to 1.3% (median) from 1.6% in March. The 2027 forecast moved to 1.85% and 2028 to 1.92%, while inflation expectations held steady at 4.5% for both 12 and 24 months. The currency forecast set USDUYU end-2026 at 40.19 and end-2027 at 41.46 in median terms.
Why did Uruguay’s inflation rebound?
The April IPC of 0.54% monthly and 3.16% annual was driven primarily by the April 1 fuel adjustment: gasoline and diesel +7% (band cap), supergás +7%. Transport prices contributed 2.98% to the monthly print, and the gasoline-supergás complex contributed another 0.66%. The Iran war pushed Brent crude above US$100 per barrel through April, with import-parity prices rising 5.92% for Súper 95 gasoline and 10.53% for diesel 50S, and the May 1 second hike will feed into the next IPC reading.
Why is Uruguay’s gasoline so expensive?
Uruguay’s gasoline price reached US$2.192 per liter on May 4, the most expensive in Latin America, with Perú’s price coming second at US$1.59 per liter and the regional average at US$1.31 per liter. ANCAP references the US Gulf Coast in its pricing, and the government has applied the 7% escape clause twice in two months given the Middle East oil shock. Energy minister Fernanda Cardona defends the strategy as a national effort to absorb cost increases through ANCAP rather than fully passing them on.
Will fuel prices come down?
A reverse adjustment is plausible from June. Brent crude fell 6.8% on May 6 to US$95.23 per barrel on US-Iran memorandum prospects, and the URSEA Precio de Paridad de Importación (PPI) report for late May will determine whether the international drop allows a fuel price cut. Uruguay’s symmetric methodology in principle requires the government to pass falls through within the −7%/+7% band, but the absorption strategy used during the upward shock could leave room for slower pass-through on the way down.
Updated: 2026-05-07T11:00:00Z by Rio Times Editorial Desk