Uruguay Inflation Seen at 5.4% by Year End

URUGUAY · ECONOMY

Uruguay inflation will end 2026 at 5.4%, the institute Cinve forecasts, up from 4.8% a month ago. The report says prices stay above the central bank’s 4.5% target until May 2027.

Uruguay inflation is set to end 2026 at 5.4%, according to Cinve, a Montevideo economics institute, in a report dated 15 October. The regional business outlet Ámbito Uruguay reported the forecast on Friday, 16 October.

That is 0.9 percentage points above the 4.5% target of the Banco Central del Uruguay (BCU), the country’s central bank. It matters to US residents and investors who earn, save or spend pesos in Uruguay.

What Cinve Forecasts for Uruguay Inflation

Cinve, a private research institute founded in 1975, puts annual inflation at 5.4% in December 2026, against 4.8% in its September report. For December 2027 it now sees 3.9%, up from 3.6% a month ago.

Inflation stays above the 4.5% target until May 2027, Cinve says, and falls below it from June 2027. A month ago the institute expected prices to be above the target only until March 2027.

Cinve projects monthly price rises of 0.57% in October, 0.35% in November and 0.20% in December. Annual inflation would climb from 4.68% in September to about 4.9% in October and 5.4% in December.

Why Prices Are Rising Faster

September inflation was 0.54% in the month and 4.68% in the year, Cinve’s report says. That beat Cinve’s own forecast of 0.33% and put prices above the 4.5% target for a second month running.

Before August, inflation had been below the target for 12 months, the report notes. Cinve blames the length of the Middle East conflict, which has pushed up oil prices and complicates every forecast.

Its base case treats the conflict as temporary, with oil staying above pre-conflict levels through 2027. It also assumes the exchange rate follows a random walk, so that only unpredictable shocks move it.

The pressure sits in volatile and administered prices, a group that includes fuel, unprocessed food, electricity, water and telecoms. Cinve’s table puts that group at 6.2% in September and 8.2% in December 2026.

Underlying inflation, which strips out those prices, was 4.1% in September and is projected at 4.3% in December. The gap between the two shows where Cinve expects the pressure to come from.

The Central Bank Context

The BCU raised its policy rate by 0.25 points to 6% from 5.75% on Thursday, 8 October, Infobae and Ámbito Uruguay reported. It targets 4.5% with a tolerance band of 3% to 6%, so a 5.4% reading would stay inside the band.

The bank says 24-month inflation expectations remain anchored near the target, Infobae reported on 12 October. It expects inflation to stay temporarily above target until early 2027, within the tolerance range, Ámbito Uruguay reported on 17 October.

The bank’s survey of 25 analysts, reported on 14 October, had a median of 4.87% for end-2026. Forecasts ranged from 4.40% to 5.40%, so Cinve’s 5.4% sits at the top.

What It Means for US Readers

US residents and business owners who pay bills in Uruguayan pesos face prices that Cinve expects to rise about 5.4% by December. That is faster than the 4.5% the central bank aims for.

Investors in peso assets should watch whether the central bank raises its 6% rate again. Cinve’s forecast is one institute’s view, not a decision by the bank.

Background is in earlier reports on the rate rise to 6%, September inflation and the central bank’s forecasts. The guide to Uruguay’s economy and the Montevideo city page help with budgeting.

What Is Not Known

It is not known whether the BCU will raise its rate again, and the sources give no date for its next decision. Cinve’s path also depends on oil prices and on the exchange rate, neither of which it can predict.

This is one institute’s forecast, and only one outlet, Ámbito Uruguay, was found covering it. Its text gives a 0.1 point revision and a 4.68% October rate, which differ from Cinve’s report, whose figures are used here.

The 6% rate and the 3% to 6% band rest on Infobae and Ámbito Uruguay; the bank’s statement could not be opened. Neither the bank’s year-end forecast nor the statistics office INE’s September figure was confirmed at the primary source.

What Comes Next

The October consumer price figure will test Cinve’s 0.57% monthly projection. Cinve had issued no newer forecast by 20 October, and its next monthly report will show whether it revises again.

Frequently Asked Questions

What is Uruguay’s inflation forecast for 2026?

Cinve expects annual inflation of 5.4% in December 2026, up from 4.8% in its September report. That is 0.9 points above the central bank’s 4.5% target.

When does Cinve see inflation returning to target?

Cinve says inflation stays above the 4.5% target until May 2027 and falls below it from June 2027. It sees 3.9% at the end of 2027.

What was Uruguay’s inflation in September?

Prices rose 0.54% in the month and 4.68% in the year, according to Cinve’s report. That is above the 4.5% target for a second month in a row.

What is the central bank’s policy rate?

The BCU raised its policy rate by 0.25 points to 6% from 5.75% on Thursday, 8 October. Guillermo Tolosa is the bank’s president.

What is Cinve?

Cinve is a private economics research institute in Montevideo that began work in 1975. Its coyuntura team publishes a monthly inflation report with forecasts.

Sources: Cinve, Informe de Inflación No. 292, 15 October; Cinve, Informe de Inflación No. 291, September; Ámbito Uruguay, 16 October; Ámbito Uruguay, analyst survey, 14 October; Ámbito Uruguay, central bank outlook, 17 October; Infobae, rate decision, 12 October (all accessed 20 October 2026).