Oddone Sees Uruguay Fiscal Outlook Improving, 2.1% Growth in 2027

Uruguay · ECONOMY

Cautious optimism in Montevideo, with an asterisk the size of the world economy.

Uruguay should improve fiscally next year and enter a faster growth path, Economy and Finance Minister Gabriel Oddone said in Montevideo — with a condition attached: ‘if the world cooperates.’ Official projections put GDP growth at 2.1% for 2027, after the 2026 forecast was cut to 1.6% from the 2.2% penciled into the budget, a revision that reflects a weaker global scenario. The Uruguay fiscal outlook, in the minister’s telling, rests on new revenue tools in the national budget, protected social priorities and a vote of confidence from international markets.

What Oddone projected

‘In 2027 we should improve fiscally and enter a growth path, if the world cooperates, that is faster,’ Oddone said, summarizing the economic team’s view of the immediate future. The official estimate is that GDP will expand 2.1% in 2027. That figure is itself a downward correction from earlier forecasts, and it follows a cut to the 2026 projection, which fell from the 2.2% written into the budget law to 1.6% as the international scenario turned less favorable than expected.

The minister pushed back against the idea that the government is out of step. ‘The growth scenario we are putting on the table for 2026 and 2027 is within the range of private projections, from local analysts to international ones,’ he said. The Uruguay fiscal outlook, in other words, is deliberately conservative: the administration of Yamandú Orsi wants its numbers to look like the market’s numbers, not like campaign promises.

The fiscal tools behind the improvement

The expected improvement leans on revenue instruments included in the national budget. The most visible are the global minimum tax, which brings Uruguay into line with the international corporate tax floor, and a levy on capital gains that broadens the collection base. Changes to the internal specific tax on high-value electric vehicles are expected to add about US$16 million a year.

On the spending side, the government is reallocating resources to protect four priorities: childhood, security, homelessness and employment. The increase in social spending is estimated at around US$31 million, some 3.2 billion pesos, financed through reallocation rather than new borrowing. ‘We believe that fiscally next year we are going to report good results,’ Oddone said, while warning that meeting those targets depends heavily on how the international context evolves.

A market vote of confidence

In July 2026, Uruguay placed US$1.6 billion in bonds on international markets, an operation Oddone reads as a signal of investor confidence in the solidity and sustainability of the country’s public finances. Access to external financing on favorable terms gives the government room to maneuver while it waits for a friendlier global environment, and it underpins the credibility argument at the heart of the Uruguay fiscal outlook.

The track record offers some support for that confidence. Official figures presented earlier this year show the structural fiscal result at -3.9% of GDP in 2025, a slight improvement from -4.0% in 2024, with net debt falling from 58.0% to 56.5% of GDP and net borrowing of US$3.079 billion, below the legal ceiling of US$3.45 billion. The five-year budget sets structural deficit targets of 4.0% of GDP for 2026, 3.5% for 2027, 3.0% for 2028 and 2.6% for 2029 — the glide path Oddone says 2027 will begin to descend.

The risks to the outlook

The minister’s conditional phrasing is not rhetorical. Uruguay is a small open economy whose fortunes track commodity prices, Argentine and Brazilian demand and global financial conditions, and the cut to the 2026 forecast shows how quickly the external scenario can bite. Oddone acknowledged that deviations in estimates are normal and said the government keeps alternative scenarios ready to respond to external shocks, without detailing specific measures.

Domestic financial conditions add another layer of caution. The central bank recently ordered banks to warn savers about the risks of dollar deposits — a separate issue from the fiscal accounts, but a reminder that confidence in the Uruguay fiscal outlook coexists with pockets of vulnerability in the financial system. Strong exports, led by beef and cellulose, remain the other pillar supporting the growth case for 2027, after exports rose 9% in the first quarter of 2026.

What to watch in 2027

Three markers will test the projection. First, tax collection: the global minimum tax and the capital-gains levy must deliver the revenue the budget assumes. Second, the external environment: a further slowdown in world growth would force another revision, while stabilization would validate the 2.1% call. Third, execution on the four social priorities, where the government has promised results within the existing spending envelope.

For now, the Uruguay fiscal outlook is a bet on credibility — that markets, analysts and voters will reward a government that under-promises on growth and over-delivers on discipline. Oddone’s own summary was simpler: credibility and confidence in economic policy, he said, are fundamental assets for sustaining growth and stability.

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Sources

• www.debate.com.uy
• spanish.news.cn

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