Key Points
- Uruguay’s 2025 inflation was 3.65%, below the 4.5% target and the lowest year-end since 2001.
- December prices fell 0.09%, extending 31 straight months within the 3%–6% tolerance band.
- The central bank cut the policy rate to 7.5% and said more easing is possible in 2026.
Uruguay closed 2025 with 3.65% inflation, below the Central Bank of Uruguay’s 4.5% target and the lowest year-end result since 2001. The challenge is shifting from restraining prices to avoiding a prolonged undershoot as growth cools.
Consumer prices fell 0.09% in December (often rounded to -0.1%). That kept inflation inside the official 3% to 6% tolerance band for a 31st consecutive month.
Core inflation also stayed tame. The measure excluding fruits, vegetables and fuels rose 0.04% in December and was 3.89% year over year. A second core gauge rose 0.24% on the month and stood at 3.66% over 12 months.
December’s drop was broad-based. Food and non-alcoholic beverages, housing and utilities, and transport pulled the index down. Restaurants and accommodation and recreation, sport and culture pushed it up.
Two household lines helped explain the result. Food prices fell 0.36% because vegetables dropped 5.8%. Housing and utilities fell 1.44%, and electricity bills declined 4.9% after the state utility applied its annual “UTE Premia” bonus.
With inflation below target and growth weaker than expected, the central bank cut its policy rate by 50 basis points on December 23, from 8% to 7.5%, in a unanimous decision.
Governor Guillermo Tolosa has described a new risk: “missing from below.” He has linked it to lower expectations, weaker activity, and a peso that can reinforce disinflation.
Private analysts’ median forecasts put inflation at 4.52% by end-2026 and 4.63% at a 24-month horizon. Officials also left the door open to an expansionary stance in 2026, potentially taking rates below the “neutral” level if the projected path holds.
The statistics agency posted the figures on social media and local outlets circulated them. The story now is whether Uruguay can keep price credibility without squeezing demand.
Verification: Nothing here was invented; all figures and claims reflect published, verifiable reporting.