Uruguay Targets 20% GDP Investment to Boost Economic Growth

Uruguay’s government, led by President Yamandú Orsi, aims to increase investment to 20% of GDP to drive economic growth. Economy Minister Gabriel Oddone announced the plan during a presentation to business leaders in Montevideo.

The target represents a four-point rise from the current investment level of 16.2% of GDP, requiring $16 billion annually—$4 billion from public funds and $12 billion from private sources.

Oddone emphasized that achieving this investment level is essential for Uruguay to grow at an annual rate of 2%. He stressed the need for macroeconomic stability, credible fiscal policies, and clear investment rules to attract both domestic and foreign capital.

Uruguay plans to avoid new taxes while reducing inflation to improve household incomes, particularly for vulnerable populations. The country faces fiscal challenges, with a public sector deficit projected at 4.6% of GDP in 2024, the highest in 35 years.

Oddone described the situation as complex but manageable, highlighting the importance of balancing fiscal consolidation with economic growth. Private sector engagement is crucial for meeting the $12 billion annual investment goal.

Uruguay aims to enhance competitiveness by streamlining regulations and fostering innovation. Foreign direct investment remains vital, having contributed significantly to export diversification and economic development in previous years.

Uruguay’s economy has shown resilience in past crises, including the 2002 financial collapse and the COVID-19 pandemic. The government hopes to leverage this experience to navigate global uncertainties such as geopolitical tensions and slowing growth in key trade partners like China and Brazil.

President Orsi’s administration seeks to balance fiscal stability with social inclusion, aiming for sustainable growth while improving income distribution and reducing poverty. Uruguay’s ambitious investment plan underscores its commitment to securing long-term economic prosperity amidst challenging circumstances.